Deed Transfers During Refinancing in New Jersey

Refinancing a property often presents a strategic opportunity to modify the ownership structure through a deed transfer. Whether you’re taking someone off title or adding someone on, it’s critical to understand the legal implications, procedural requirements, and potential pitfalls involved.

This guide walks you through key legal considerations, step-by-step procedures, common mistakes to avoid, and associated costs for executing a deed transfer during a refinance—particularly in New Jersey.

Why Transfer Ownership During a Refinance?

1. Removing a Party with Legal or Financial Issues

If a current title holder has lawsuits, court judgments, or delinquent taxes, retaining them on title can put the property at risk. Refinancing provides a chance to remove such individuals and preserve the property’s long-term value.

2. Removing a Party Added for Mortgage Approval Only

Sometimes individuals are added to title at the original closing solely to meet mortgage qualifications (e.g., debt-to-income ratios). If they don’t contribute to payments or maintenance, refinancing may be the right time to remove them from title and streamline ownership.

3. First Safe Opportunity Due to Mortgage Clauses

Most mortgages contain a due-on-sale clause, which permits lenders to demand full repayment if title is transferred without their consent. Refinancing pays off the current mortgage, eliminating this risk and offering a safe opportunity for a deed transfer.

Step-by-Step: Deed Transfer During a Refinance

Step 1: Pre-Approval for Refinancing

Before any deed changes, secure loan pre-approval to confirm eligibility. Without this, a transfer is premature and possibly moot.

Step 2: Hire a Qualified Real Estate Attorney

Especially in states like New Jersey, New York, or Massachusetts, legal guidance is essential. Your attorney will:

• Draft the deed
• Review the title report
• Prepare required forms

Step 3: Drafting the Required Documents

Your attorney should prepare:

• Deed: Identifies grantors, grantees, and includes a legal description of the property.
• GIT/REP Form: A residency form required for New Jersey recordings (varies based on seller residency).
• Affidavit of Consideration: A notarized document providing transaction details and ownership affirmations.

Step 4: Execute and Deliver Documents

Once signed, these documents are sent to the title company, not the attorney, to be held in escrow pending refinance completion.

Step 5: Recording

Once the refinance closes:

• The title company records the deed and supporting forms with the county clerk.
• Within ~30 days, county records will reflect the change.
• The city tax records update ownership information shortly thereafter.

Adding Someone to the Deed Instead?

Common Scenarios:

• Spouses being added during refinance
• Co-borrowers contributing income or credit to qualify

Caution: Think Beyond Qualification

Even if someone helps you qualify, if they won’t contribute to payments or property upkeep, consider the risks:

• Future refinance or sale will require their cooperation.
• Their financial liabilities (judgments, liens) could cloud title.
• Joint ownership could complicate estate matters.

Choose the Right Ownership Structure:

• Tenants in Common: Separate interests; no survivorship rights.
• Joint Tenants with Right of Survivorship: Property automatically transfers to the other owner upon death.

Consult a real estate or estate planning attorney to align deed structure with your long-term goals.

Common Mistakes to Avoid

❌ Rushing Without Proper Review

Failing to have the lender, attorney, or title company review documents ahead of closing can delay the transaction.

❌ Using Online Templates Without Legal Advice

DIY deeds often lack critical clauses (e.g., marital interest waivers) or essential attachments like legal descriptions. This can cause major title issues down the road.

❌ Ignoring Title Issues

Even if there’s no sale, a deed transfer is legally equivalent to a conveyance. Treat it with the same due diligence as a full sale.

Cost Breakdown of a Deed Transfer in NJ (As of July 2025)

Service	Estimated Cost
Attorney Flat Fee	$500–$1,000
Title Company Fees	~$500–$600
Recording Fees	Varies by document pages and mortgage size (typically $500–$1,000)

Estimated Total: $1,000–$2,000
(Actual costs vary depending on transaction complexity and mortgage amount.)

Final Thought

Deed transfers during refinancing are a strategic move—but they require informed decisions and precise execution. Whether you’re removing or adding someone to title, partnering with a knowledgeable real estate attorney ensures your property’s value and title integrity are protected.