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What is the impact of homestead on financing?

QUESTION:

I want to buy a house and title it only in my name. My purchase loan has been approved and the lender will not require my wife to sign the note. However, the lender does require that she sign the mortgage. The lender also wants my wife to sign a document that says something about releasing her marital rights to the property. Why does the lender want my wife to sign these documents when the loan and the title are only in my name?

ANSWER:

In order to understand the lender’s requirements you need to understand a little bit about Florida’s homestead law. I say "a little bit" because Florida’s homestead law can be complex and confusing. Certainly, this answer to your question will focus only on a small aspect of the basic homestead concepts as regards a lender that wants a valid lien on homestead property.

Under Florida’s homestead law, both spouses must join in giving any deed or mortgage to real property which qualifies as their homestead residence.

What this means to the lender is that your wife could invalidate the lender’s mortgage if this property turned out to be your homestead and your wife had not signed the mortgage.

The lender did not require your wife to sign the note because the lender is relying on only your credit and ability to repay the note. However, one of the conditions of the loan is that the lender has a valid 100 percent mortgage lien on the real estate. In order to eliminate the risk -- even if this property is not your homestead -- the lender must have your wife join in the mortgage.

When a spouse is required to join in signing a mortgage but not the note, it would be good to include language that the spouse is signing only to satisfy the spousal joinder requirement contained in the Florida Constitution and that by signing the spouse is not assuming any liability or obligations in the note or mortgage.

This information is not intended as specific legal advice to anyone and is based upon facts that change from time to time. Individuals should seek legal counsel before acting upon any matter involving the law.

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