Marital Status and Florida Real Estate

Whether you're single, married, divorced, separated or widowed, your marital status plays an important part in obtaining financing here in the state of Florida.  It's one of the questions on the Uniform Residential Loan Application that every mortgage lender uses, from coast to coast.  

Marital status in Florida is important because it deals with everything from the financial responsibility of the mortgage payments for your new home loan, to the ownership/ title and survivorship on a home.

We're going to cover a list common questions from our clients that come up over and over again as a part of our daily loan origination practice.

QUICK NOTE:  This information in this article pertains to Florida Residential Real Estate where the home is being financed with a mortgage.  All-cash transactions may be different. This is not intended to be a substitute for legal advice. For legal advice, please refer to a lawyer.  

By the way, are you recently divorced in Florida  and want to some financial tips to help you make the most of your fresh start?  (including whether or not you need to refinance your home?) Check out our other article, FINANCIAL TIPS AFTER DIVORCE IN FLORIDA. 

BASIC DEFINITIONS:

The most fundamental thing to understand here is that there is a difference between the TITLE of a home and the MORTGAGE on a home.  

TITLE:

The TITLE is the legal instrument that shows who owns the home.  Each home has a legal title instrument that is a part of the public record and shows the name(s) of the owner(s).  One home can have multiple owners on title, such as spouses, domestic partners, family members, etc.  

The TITLE is not the same thing as the financial responsibility for the mortgage payments.  A person who appears on the title may or may not appear on the mortgage payments at all. This is common with many spouses and family members.  For example, one spouse may be 100% responsible for the mortgage payment, while the other spouse shares an equal ownership percentage.  Other spouses share equal responsibility for both the mortgage payments and the ownership.  

When there is a mortgage on a home, all borrowers who are responsible for the mortgage payments are automatically listed on the title of the home.  Any adult can be added to the title of a home through a process called a Quit Claim Deed.  In Florida, a Quit Claim Deed can be performed by any title company, real estate attorney or family law attorney.

Rights of Survivorship - The title also helps direct what happens to the ownership of a home if the owner(s) should pass away.  

MORTGAGE: 

The MORTGAGE defines the financial responsibility to make the monthly payments on the mortgage note to the lender as it relates to the home.  Technically, an instrument called a NOTE is the written promise of the borrower to make the monthly payments to the lender.  The MORTGAGE is the legal instrument that legally affixes the NOTE to the home, essentially making the home itself the collateral for the note.  

If you don't make the monthly payments, the MORTGAGE is the instrument that makes it possible for the lender to take over the ownership of the home for non-payment of the NOTE through a process called foreclosure.

SPOUSES AND FLORIDA REAL ESTATE

In the state of Florida, spouses who purchase residential real estate as married individuals for must both be on the title of the home, regardless of whether one or both spouses are responsible for the mortgage payments.  This applies to any home that is purchased as a Primary Residence/Homestead or Second Home/Vacation Homes.  

If the home is being purchased for Investment purposes (where neither spouse is occupying the home themselves), then only one spouse is required to be on the title of the home.  

QUESTIONS & ANSWERS: 

At a real estate closing for a primary residence or second/vacation home, ALL married parties must sign onto the title of the home, whether or not both spouses are financially responsible for any mortgage payments. 

Now that we've covered the basics, let's dive into the common questions: 

​QUESTION 1.   
I'm married. Does my spouse need to go on the loan application?  

• ANSWER: No, unless it’s needed for extra income.  Or unless your spouse wishes to gain mortgage credit history.

QUESTION 2:   
I'm married. Does my spouse need to go on title when I am buying a home?  

• ANSWER: YES, if the home is being occupied by either spouse or is a Second / Vacation Home. If the home is being purchased for Investment purposes and you neither spouse intends to live in the home, then your spouse does NOT need to be on the title of the home.

QUESTION 3:
I’m currently in the middle of a divorce.  Can I still buy a home that I can live in?  

• ANSWER: YES, but keep in mind that if you’re still married at the time of the closing, your spouse will own half of the home and must sign on the title. If you're looking to go it alone, wait until the divorce is final.

QUESTION 4:
I’m separated from my spouse, but I’d like to buy a home for myself and move out. Can I do this?

• ANSWER:  YES, however if you’re still married at the time of the closing, your spouse will own half of the new home and must sign onto the title of the new home with you. When it comes to financing real estate, Florida does not recognize "separated" as an official marital status. You are considered either "married" or "unmarried". If you're looking to go it alone, you will need to wait until an official divorce is final. 

QUESTION 5: 
I’m not legally married, but I’m in a civil union. Can I buy a home? 

• ANSWER: YES. When it comes to buying real estate, the same rules apply to civil unions that apply to marriages.

QUESTION 6:   
I’m divorced and my spouse was awarded our old house.  Can I buy a new home?  

• ANSWER:    YES. You may buy a home on your own. If your name appears on the monthly mortgage statements for your old house, be sure to follow up with your spouse to make sure they refinanced you off of the mortgage as soon as possible.  If not, any of your ex-spouse's late payments on that mortgage may negatively affect your credit rating.  Also, be sure to keep your divorce decree and marital settlement agreement handy for your new lender.

QUESTION 7:
I’m recently married.  How do I add my new spouse to my existing home?  

• ANSWER:   You may add them to the title of the home through a process called a Quit Claim Deed. Here in Florida, you can a quit claim deed from any title company, real estate attorney or family law attorney. 

QUESTION 8:  
 I was single when I bought my home, but I’m married now. Is my spouse automatically added to my mortgage loan or the title of the home?  

• ANSWER:   NO.  Your spouse is not automatically added to the title of the home.  A marriage provides ownership, but does not change the title documents. The best way to get that done is with a Quit Claim Deed…Here in Florida, you can get one of those at any title company, real estate attorney or family law attorney.

QUESTION 9:
I was single when I bought the home, but now I’m married. What is the best way to make sure my spouse keeps the house if something happens to me? 

• ANSWER:    ​The best way to provide survivorship on a house is by adding your spouse to the title of the home through a Quit Claim Deed.  You can also reach out to a family law attorney to get a Will drawn up. 

QUESTION 10:    
I just completed my divorce and the judge awarded me the home.  How do I make sure that my former spouse is removed from the home?  

• ANSWER:   The are only two ways to remove a spouse from the responsibility for a mortgage: 1) Refinancing or 2) Selling the home.  Either of these options will ensure that the shared financial responsibility of the mortgage debt is also separated.

QUESTION 11: 
I’m married and my spouse is the only one on the mortgage. What happens to the home if something happens to them and I can’t make the payments?  

• ANSWER:   If the mortgage payments are not being made, the lender will begin foreclosure on the home, even if you’re on the title and living in the home. If you’re looking to ensure that the mortgage is paid off upon the death of a borrower, there are types of Mortgage Protection Insurance policies out that there, which are a type of Credit Life Insurance policy, but generally speaking, the most affordable way to protect a surviving spouse and family is with a standard Term Life Insurance Policy. 

QUESTION 12:    
I’m divorced and I’m applying for new home loan.  My former spouse never refinanced our old home and the mortgage still shows up on my credit report. Can I still qualify for a new home loan?  

• ANSWER:   YES.  Keep a copy of your Divorce Decree and Marital Settlement Agreement showing that your former spouse was awarded the home, and give these documents to your new lender.  You also need to be stay on top of this to make sure your former spouse refinances that mortgage as soon as possible. This is to ensure that your credit history is not negatively affected if your former spouse makes late payments on that mortgage.

WRAPPING UP

If you ever have a question regarding the title of a home in the state of Florida, the best place for advice is usually a local title company.  You can also contact a Real Estate attorney or Family Law attorney for Quit claim deeds, Wills, Probate questions, survivorship questions, and more. 

To Refinance or Not to Refinance...

Are you recently divorced in Florida  and want to some financial tips to help you make the most of your fresh start?  (including whether or not you need to refinance your home?) Check out our other article, FINANCIAL TIPS AFTER DIVORCE IN FLORIDA. 

If you're purchasing anywhere in the  state of Florida and have questions about a mortgage and/or how a mortgage relates to the title of a home you're looking to purchase, we'd be delighted to discuss your options and answer your questions.  

You can reach us HERE.

Yours in successful homeownership,

 Derek Bissen
Loan Originator
NMLS#365627
Unconventional Lending Program Director