How to Remove a Name from Joint Mortgage After Divorce

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.

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Option 1: Get your ex-spouse to refinance (or do it yourself)

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.

Pros and cons of refinancing after a divorce

As with any major financial change, there are challenges, benefits, and pitfalls to consider.

Pros of refinancing after a divorce:

• Clean separation of real estate assets: Refinancing provides a clear division of ownership and financial responsibility going forward.
• Removing liability: If one party wants to keep the house, refinancing allows them to remove their former partner from the mortgage, relieving them of any future liability for the debt and protecting their credit score.
• Buying out a partner: In cases where the mortgage is solely in one party's name, but the divorce settlement requires buying out the other partner's share of the house, a cash-out refinance, or a home equity line of credit (HELOC) can be used to access the home's equity for the buyout.

Cons of refinancing after a divorce

• Qualification challenges: The remaining spouse must qualify for the new loan alone or with a new co-borrower. The departing spouse’s income and credit won't be considered. However, you can use alimony and child support to qualify for the new home in some cases, which could help if you’re on the receiving end.
• Timing considerations: There is no right time to refinance after divorce. Waiting until the divorce is settled provides a better understanding of financial obligations, but interest rates may rise in the interim, leading to higher interest expenses on the new loan.

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.

Option 2: One spouse assumes the loan

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.

Possible pros of a loan assumption:

• Lower interest rate: In a high-interest rate environment like now, assuming an existing mortgage allows buyers to continue a loan with their lower interest rate than the current market might offer.
• Cost: An assumption is usually cheaper than a full refinance.

Possible cons of a loan assumption:

• Large cash outlay: If there’s a lot of equity in the property, one spouse may have to come up cash to buy out their ex.
• Complex process: You must work with your servicer to accomplish an assumption. Many services are not well-versed in how to do these, so you could end up in a slow, grinding process.

Option 3: Have your ex sell the home

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.

Option 4: Remain on the loan

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.

Does signing a quitclaim deed remove one spouse from the loan?

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:

• Have the quitclaim deed notarized
• Record the quitclaim deed with the county recorder's office

A local title company can help with the process.

Additional tips for getting your name off of the mortgage

• Consider mediation or legal advice: If there are disputes or complications, consider hiring a mediator or seeking legal advice to help navigate the process.
• Keep the lines of communication open: It may be tough, but the best way to accomplish this transaction is with open and honest communication with your ex-spouse. If everyone is fully informed, the transition is likely to be a smoother one.
• Call on a divorce financial advisor: There are professionals who can help you navigate the financial aspects of divorce, including removing your spouse's name from the mortgage.

Getting your name off a joint mortgage after divorce

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.