The name on the deed...

What if the lender for the new property is insisting that the loan include my spouse’s name, and that my spouse must also be on the deed? Is this a problem?

The taxpayer (name that appears on the deed) for the sale of the old property must be the same taxpayer on the deed for the new property.

For example: If you sell as John C. Investor, you must buy as John C. Investor.

Sometimes, for credit and underwriting reasons, the lender will require that both husband and wife appear on the loan. To secure the loan, the lender will also require that both names appear on the deed. Depending on the particular situation, this may be no problem. Carefully review the following examples for the various scenarios.

For example: If you sell the old property for $100,000, and you are buying the new property for $200,000, you only need to acquire $100,000 of the new property (in this case 50%) to satisfy your exchange. You and your spouse could be equal owners of the new property.

Continuing our example: If the new property will cost you $150,000, you will need to acquire two-thirds ($100,000/$150,000 = 2/3) to satisfy your exchange. Your spouse can acquire the other one-third. Your lender may or may not accept the fact that your spouse is on title for less than 50%. You might try having the deed show that you and your wife are joint tenants, without specifying a percentage. This will make the lender happy, and the actual percentage that you each own can be shown on the exchange documents and settlement statement.

Final example: If the new property will only cost you $100,000, you have a problem. You must acquire 100% of the property to satisfy your exchange. In this case, there is no room for your spouse to be included on the title. Adding your spouse will definitely jeopardize your exchange. You can help build your case for the IRS by getting a letter from the lender that states their requirement to have your spouse on title. Therefore, if you get audited, you can give an solid explanation about why your spouse is on the title. Hope for an understanding auditor.

--The Experts

Add new comment

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
  • Allowed HTML tags: <a> <em> <strong> <p> <br>
Please prove you're not a bot.
Enter the characters shown in the image.