Did You Know that Borrowers Can be on the Loan and not on the Title?
Title Only Buyers
Buyers who only want to be listed on the property’s title but not the loan are called “title only” buyers. This is often the case with couples where one spouse has credit issues that could affect the loan terms. In these situations, the spouse with good credit may be the only one listed on the loan, as long as they have sufficient income to qualify. However, both spouses will be listed on the title.
"Loan Only" Buyers
“Loan only” buyers who want to be listed on the loan, but not on the title of the property. This type of arrangement is less common than “title only” buyers, where the buyer is listed on the title but not the loan. Note that “loan only” arrangements are typically only available for conventional loans, and not for FHA or VA loans. Additionally, it is important for “loan only” buyers to understand that they are still responsible for the performance of the loan, even if they are not listed on the title, until it is paid off or refinanced in their name.
So yes! It is possible for a borrower to be on the loan but not on the title of a property. This can occur in situations where the borrower is acting as a non-occupant co-borrower to help a relative or friend qualify for a mortgage, but does not have any ownership in the property. In this case, the borrower is responsible for repaying the mortgage, but does not have any legal ownership or rights to the property. Understanding the distinction between being on the loan and being on the title is important, as it can have significant consequences for their financial and legal obligations.