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When a couple divorces, one of the most important financial decisions they need to make is what to do with the marital home.
If one spouse wants to keep the house and the other wants out, the spouse who wants to leave the house will need to remove their name from the mortgage. Nobody’s name is removed from the mortgage automatically in the event of divorce, the mortgage must be altered.
The big question is: How do I get my name off the mortgage after a divorce?
You’ve come to the right place. There are a few ways to do this, and we’ll lay out the details of how to get this item off your to-do list.
The most common way to get your name removed from a mortgage is to have your ex refinance the mortgage into their name only.
It eliminates the previous mortgage entirely, then sets up a whole new agreement that is the sole responsibility of your ex.
Alternatively, you can switch roles if you are the one who wants to keep the home—refinance the mortgage in your name so your ex will have no responsibilities or claim left on the home. Either way, it gets this particular job done.
Start by deciding which of you will take on the house; whoever is the one to refinance will ultimately have to qualify for the new mortgage alone.
As with any major financial change, there are challenges, benefits, and pitfalls to consider.
While they don’t have any of the responsibilities for the home anymore, the person who is eliminated from the mortgage also won’t have access to any of the home’s equity either.
That person would likely need to find a new place to live—at the very least—and possibly qualify for their own mortgage.
The person who is keeping the original home will likely have to pay some of the equity of that home to their ex as a part of the divorce agreement.
Each situation is unique, and it’s essential to carefully assess individual circumstances before deciding whether to pursue a refinance after a divorce.
Check your refinance eligibility.In certain cases, lenders may permit the removal of one spouse through assumption or a loan modification.
However, it’s important to note that in such instances, the remaining spouse may need to re-qualify for the loan.
Consider having your ex sell the home on your behalf.
By doing so, you can completely eliminate the burden of the mortgage. However, it’s important to ensure that there is sufficient equity in the property to cover any outstanding loan balance.
Also, keep in mind that if the home is sold through a short sale, there is a possibility that it may negatively impact your credit score.
This option comes with risks. Your spouse could miss a payment, causing your credit score to plummet.
Make sure your ex-spouse is on board to make timely payments to protect your credit.
Unfortunately, a quitclaim deed does not remove a spouse from the mortgage. It only removes them from title, which is at least a start.
A quitclaim deed is a legal document that transfers ownership of a property from one person to another and is very easy and affordable to complete.
To enable a quitclaim deed to be effective, you will need to:
A local title company can help with the process.
Removing your spouse’s name from the mortgage after a divorce can be a complex process, but it is important to do it correctly.
By following one of the options above, you have a much better chance of ensuring the process goes smoothly and that you are protected financially.
Get a no-obligation refinance quote here.Our advice is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.