How to hold title to a home with your family

When a family buys a home together, there is more to decide than the loan: whose name the home goes in, and in what form. This guide is for you if you are buying with your partner, children, parents or siblings. It explains what official sources and some state laws say; it is not legal advice, and at the end it tells you where to find free legal help.

Are community property states on the IRS list

9 states⁷

Owners in Florida hold as tenants in common if the deed says nothing else, except spouses by the entirety

2 or more³

Borrowers on an FHA loan take title in their own name

All⁹

Is when an Arizona beneficiary deed takes effect

At death⁸

What title and the deed are

According to the CFPB, when you buy your home you receive a document most often called a deeddeedA deed is the legal document the seller uses to transfer ownership of the home to you. The seller signs it at closing, it lists the names of all the buyers and you receive a copy. Afterward, the settlement agent records it with the county records office; that recording puts the public on notice that you are now the owner. There are several types: a warranty deed gives the most promises about the title, and a quitclaim deed promises nothing. Do not confuse it with a deed of trust, which is the mortgage document.See the full definitionClose. It shows that the seller transferred legal ownership of the home to you, which is called titletitleTitle is your legal right to own and possess a property. The deed is the document showing that the seller transferred that right to you, and legal title is the title that can be documented in public records. As part of the purchase, a title search is done to see whether anyone else has a claim against the home; common claims come from a previous owner's unpaid taxes or from contractors who say they were not paid for work on the home. Title insurance protects you if such a claim shows up later.See the full definitionClose. Title insurancetitle insuranceTitle is the legal right of ownership of the home, and title insurance protects you if, after closing, someone claims a right to it: an old debt, an heir, an error in the records. There are two policies. Most lenders require a lender's policy, which protects the amount they lent. The owner's policy is optional, paid once at closing, and protects you for as long as you own the home, including the legal costs of defending your right. You can shop for a title company; the price varies by state.See the full definitionClose can protect you if someone later claims rights to the home. Most lenders require a lender’s policy; the owner’s policy is not required, but it protects your investment.¹

The deed says who the owners are and in what form they own. That form decides, for example, what happens to each person’s share if someone dies. The rules come from each state’s law, so this guide uses examples from three states whose laws are published on their official sites: Arizona, Florida and Washington. If you live in another state, its rules may differ.

The ways to own a home together

On documents you will see the terms joint tenancy with right of survivorship and tenancy in common. Here is how they compare:

Three ways a home can be titled to a family

One person

Sole ownership

• One person takes title on the deed.¹
• On FHA, if there are more borrowers, all of them must take title.⁹

The share passes to the others

Joint tenancy with right of survivorship

• If an owner dies, their share passes to the survivors.²
• In Washington it is created only in writing and expressly.⁴
• In Washington each owner can sever it on their own.⁴

Each owns a share

Tenancy in common

• There is no right of survivorship.³
• In Arizona, Florida and Washington it applies if the deed says nothing else, with special rules for spouses.²³⁵

What decides the form is what the deed says and your state's law.²

Arizona. By law, when property is granted to two or more people, it creates an estate in common and not a joint tenancy, with exceptions such as husband and wife. For one owner’s share to pass to the others at death, the deed must expressly declare a joint tenancy with right of survivorship. Spouses can also declare community property with right of survivorship.²

Florida. The law says the right of survivorship does not apply on its own. Except for property spouses hold by the entirety, a transfer to two or more people creates a tenancy in common unless the document expressly provides for survivorship. If the marriage is dissolved, the spouses become tenants in common.³

Washington. Joint tenancy lets property pass to the survivor without the cost or delay of probate. It is created only by a written document that expressly declares it, and each owner has the right to sever it on their own.⁴ If it is not declared, property owned by two or more people is held in common.⁵

Community property

In some states, what spouses buy during the marriage belongs to both. According to the IRS, the community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. The laws of the state where you live decide whether you have community property. Generally, community property is what you, your spouse or both acquire during the marriage while living in one of those states. Separate property includes, for example, what each of you owned before marrying or received separately as a gift or inheritance. The IRS also notes that Alaska, Tennessee and South Dakota have laws with a community property election.⁷

Washington shows how a state law puts it: what one or both spouses acquire after marriage is, in general, community property.⁶ And if property in common is in both spouses’ names, it is presumed to be community property.⁵

Does your spouse have to sign? According to the CFPB, if you qualify on your own, a lender generally cannot require their signature for the credit. But on a mortgage it can ask for it if state law requires it to use the home as collateral, for example to create a valid lienlienA lien is a legal right a creditor holds in your property to make sure you repay a debt. It usually prevents the property from being sold until the debt is paid, and if you do not pay, the creditor may be able to take the property. Your mortgage is a lien on your home: when you pay it off, the lien is released and that shows up in your county's property records. There are other kinds, such as a federal tax lien, which is the government's legal claim against all your property when you do not pay a tax debt.See the full definitionClose or clear title.¹² In community property states, FHA does not require your spouse to be a borrower or co-signer, though the mortgage must be signed by whoever state law requires.⁹

What loans require

The loan also sets rules about who goes on the title. On FHA loans, all borrowers and co-borrowers, whether or not they live in the home, must take title in their own name or a living trust at closing. A co-signerco-signerA co-signer is a person who signs another person's loan or credit account to back it up, and by doing so becomes responsible for the debt. If the borrower does not pay, the creditor can collect up to the full debt from the co-signer, plus late fees or collection costs, without first trying to collect from the borrower, and the default may become part of the co-signer's credit record. A federal FTC rule calls for the co-signer to get a written notice explaining these risks before signing. On a mortgage, according to Fannie Mae, a co-signer signs the note and shares liability for the debt with the borrower but has no ownership interest in the home on the title.See the full definitionClose signs the notepromissory noteThe promissory note (or simply the note) is the document you sign at closing to promise you will repay the loan to the lender. It describes what you are agreeing to: how much you owe, the interest rate, the payment dates, the total you will pay, the length of the loan, whether the payments can change and where to send them. It is separate from the mortgage or deed of trust, the document that gives the lender the right to take the home if you do not pay. Some terms, such as a prepayment penalty, may be in an addendum to the note. You can ask for copies of the documents before closing to review them.See the full definitionClose and is liable for the debt, but does not own the home or sign the mortgage.⁹ Also, every purchaser on the sales contract must be a borrower, although a family member of a purchaser may be listed on the contract.⁹

For Fannie Mae, a borrower becomes an owner and is liable by signing the security instrument (the mortgage or deed of trustdeed of trustThe deed of trust is, along with the "mortgage," one of the most common names for the security instrument you sign at closing. With it, the home becomes collateral for the loan: if you do not make the payments or break the agreement, the lender can take the home and sell it to pay off the loan. Your signature on this document must be notarized. It is separate from the promissory note, which is your promise to pay. In some states, the lender can foreclose without going to court by following the notices in a "power of sale" clause in this document.See the full definitionClose), signing the note and taking title in their own name.¹⁰ Borrowers who do not live in the home may or may not be on the title, and co-signers have no ownership interest as shown on the title.¹¹

How to decide and put it in writing

1. 1. Decide who will own the home

   Before you make an offer

   On FHA, every purchaser on the contract must be a borrower.⁹

2. 2. Check who signs the loan

   When you apply

   On FHA, every borrower takes title; co-signers do not.⁹

3. 3. Learn your state's rule

   Before closing

   In Arizona, Florida and Washington, without express words, property owned by several people is held in common.²

4. 4. Ask whether your spouse must sign

   Before closing

   State law may require it for the lien to be valid.¹²

5. 5. Read the deed before you sign

   Closing day

   Do not sign anything until the documents say what you expected.¹³

   Try it with your numbersDocument checklist

What happens if one of the owners dies

This depends on how the title reads and on state law. In a joint tenancy with right of survivorship, the share of the owner who dies passes to the surviving owners.² In Washington, the law says the property passes that way without the cost or delay of probate.⁴ In a tenancy in common there is no such right of survivorship.³

Example with real numbers

Two siblings buy a typical home

An example with the typical US home value and Washington law. Your state's rules may differ.

Home price (typical US value)

$332,700

If the deed says nothing special

They are tenants in common

If the deed declares a joint tenancy

The share of the one who dies passes to the other sibling

To be a joint tenancy

It must be declared in writing, expressly

This is an example. In Washington, without an express declaration, property owned by two or more people is held in common,⁵ and joint tenancy lets the property pass to the survivor without probate.⁴

Run it with your numbersHow much house can I afford?

Some states also allow a deed that takes effect only when the owner dies. In Arizona it is called a beneficiary deed: it passes the property to the person the owner chose when the owner dies, along with any mortgages and liens. It can name several beneficiaries, who take title as joint tenants, tenants in common or another form valid in the state.⁸ Inheritance rules and this kind of deed vary from state to state; you can find more guides on the topic under owning a home.

If this is you

You are buying with siblings or children

Check whether the deed will say joint tenancy or tenancy in common; without express words, several states treat it as in common.³

Your parents want to leave you the home

Some states, such as Arizona, have a deed that passes the home to the person they choose at death.⁸

You are married in a community property state

What you acquire during the marriage generally belongs to both of you.⁷

You want legal guidance and cannot pay for it

LSC-funded legal aid offices serve low-income people.¹⁴

Mistakes that cause problems later

• Mistake: Assuming co-owners automatically inherit from each other.

  Instead: In Arizona, Florida and Washington that takes express words in the deed.²³⁴

• Mistake: Signing the deed without reading how it says you own the home.

  Instead: Take your time and do not sign until it says what you expected.¹³

• Mistake: Thinking the co-signer owns the home.

  Instead: They sign the debt, but do not own the home or sign the mortgage.⁹

• Mistake: Forgetting a spouse's signature that state law requires.

  Instead: Ask before closing whether your spouse must sign.¹²

• Mistake: Listing someone on the contract who will not be on the FHA loan.

  Instead: On FHA, purchasers on the contract must be borrowers, except a family member.⁹

Where to get free legal help

Choosing how your family holds title is a legal decision. If you want guidance, free legal aidlegal aidLegal aid is the free civil legal help that nonprofit organizations and their lawyers provide to low-income people in civil, not criminal, matters. In housing, that includes representing families facing eviction or foreclosure, alongside matters such as custody, child support, protection from domestic violence and access to benefits. In the United States, the Legal Services Corporation, created by Congress, funds a nationwide network of these organizations; its finder points you to the one in your area. Each sets its own income limits.See the full definitionClose is an option, not a requirement. The Legal Services Corporation, established by Congress, funds civil legal aid for low-income people; on its site you find the nearest office by entering your address or city. LawHelp.org also has free legal information and forms.¹⁴

At closing, if anything about the sale is unclear, the CFPB recommends asking your real estate agent or settlement agentsettlement agentThe settlement agent (also called a closing agent) is the person or company that coordinates the closing so that everything the contract requires is accounted for. Depending on the location, it may be a title company, an escrow company (in most western states) or a closing attorney (in some eastern states). It collects the money from the lender and from you, pays the seller, distributes the closing costs and records the documents with the county. It works for all the parties; it is not your personal representative. Ask it how to pay the money you need to bring to closing.See the full definitionClose: the title companytitle companyA title company is a company, or its authorized agent, that is qualified to issue title insurance. It searches public records for problems with the home's title (a title search), prepares the title commitment and issues the lender's and owner's policies. In most states, the fee for conducting your closing is also part of its charges. If title services are listed in section C of your Loan Estimate, you can shop for them yourself. Under the federal Real Estate Settlement Procedures Act (RESPA), a seller may not require you to buy title insurance from a particular company.See the full definitionClose, escrow officer or attorney.¹³ For your home-buying numbers, a HUD-approved housing counselorHUD-approved housing counselorA HUD-approved housing counselor works at an agency HUD has approved to provide housing counseling: independent, expert advice customized to your situation about buying a home, renting, a missed mortgage payment, a foreclosure or credit problems. The agencies usually charge little or nothing; many serve in Spanish and offer the homebuyer education course several assistance programs require. They are not lenders or real estate agents and sell you nothing. Your county page lists the official agencies with phone numbers.See the full definitionClose gives independent advice, often free or at low cost.¹⁵ The guides on buying with family as co-borrowers and the Closing Disclosure help with the next steps.

What to do this week

1. List who will own the home and who will sign the loan.⁹
2. Look up your state’s law on joint tenancy and tenancy in common on the legislature’s official site.²
3. If you are married, check whether your state is a community property state.⁷
4. Ask the title company how the deed will say you own the home, and read the draft before closing.¹³
5. If you want guidance, find a free legal aid office on the LSC site or LawHelp.org.¹⁴
6. Use the document checklist for what each person needs to bring to closing, and read the guide on how to buy a home step by step.