 You
should be on the deed
|  Dear
Dr. Don,
I am 28 years old. My credit history is not very good. I
have at least $10,000 I owe from about seven years ago. I don't have a bank account
or a job. I was married this October. My husband has a daughter who lives with
us. I quit school three years ago to stay home and raise her.
My situation is: We are buying a home. The entire down payment
on the house was given to me by my dad and placed in my husband's
bank account so that it would be there when he applied for the loan.
Now he says because of my credit history and that I am a homemaker,
everything must be in only his name; the deed, the loan, the entire
$50,000 deposit, everything, in case we want to refinance the house
later. I am worried that even though we are married I will never
have any rights to this house since it appears I haven't contributed
at all. What can I do? How does it all work? Thank you.
-- Angelica Angles
 Dear
Angelica,
There's a difference between being named
on the loan and being named on the deed. Your refinancing options aren't limited
by you being named on the deed to the property. You've got at least 50,000 reasons
as to why you should be on the deed.
The only real argument against you being named on
the deed is if you're worried about no longer being "judgment
proof" with your creditors. That's when a creditor doesn't
see a justification for taking you to court and winning a judgment
against you for the money you owe. No assets -- no payoff. Depending
on the type of debt, your obligation to repay that debt may also
be over or almost over. You should rely on professional legal advice,
but it's worth looking into.
The statute of limitations on credit card and other
debts varies by state, but the Bankrate feature, "State
statutes of limitations for old debts," will give you a
greater appreciation for the details. Bankrate's Debt Adviser, Steve
Bucci, also weighs in on this issue in a recent
column.
Since you're not working, being named on the note
doesn't do much of anything toward improving the loan application,
especially with your poor credit history. Things could be looking
up with your credit history, however, since negative information
only stays on your credit report for seven years. Those old bad
debts could be dropping off your report. If you haven't already
gotten a free copy of your credit reports, take this opportunity
to review them and see how long you have to go before you get out
of the penalty box. The Bankrate feature, "How
to get your free credit report," will show you how to request
those reports.
The
mortgage lender will want to know whether money provided by a family member for
a down payment is a gift or a loan. It makes a difference in their decision to
lend to you. If your father gave the money to you, a gift letter to that effect
can make it so there's no reason to play games in holding it in your husband's
individual checking account. A gift letter simply states that the money is a gift
and does not need to be repaid.
You need to discuss all this with your husband
and insist, barring any judgment-proof argument, that you are named
on the deed to the property. You can talk to the lender about whether
it would help your loan application to be named on the loan. I have
some concerns about his holding the money in his sole account, but
I'm not in the marriage. You need to decide if you're concerned
and if so, at a minimum, move the money to a joint account; at a
maximum, a joint account that requires both signatures to access
the funds in the account.
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