06 Jun How Can I Remove My Soon to Be Ex-Spouse’s Name from Our Mortgage?
Separation and divorce are not only emotionally draining but also prompt some questions about the assets that have been attained during the marriage. The family home and attached mortgage is one of the first assets to question. Who gets the house? And, how can one spouse’s name be removed from the mortgage? Take a look at the following options for home-owning couples who are dealing with a separation or divorce.
Refinancing the Loan
Obviously if both parties names are on the loan, the mortgage was granted based on two credit scores and a joint income. If one spouse is seeking the home and remaining balance on the mortgage, the only option for him/her is to refinance the home in just his/her name. This involves an entirely separate loan application in just one spouse’s name. If your spouse decides to take the mortgage into his/her name, this would mean that you might have to get another if you are going to buy another house, you might want to try something like Money Expert to help you find a mortgage.
Why is this Challenging?
When the house was purchased, the loan was granted based on the credit and income of two individuals. Depending on the remaining balance of the mortgage, it can be difficult to qualify for the loan independently. If the spouse looking to keep the house lacks the financial backing (income and credit score) to secure the loan, he/she may need a larger down payment or a cosigner.
Why is this Important?
If the house remains in the names of both divorced spouses (title and/or mortgage), and only one spouse resides in the home, both are legally exposed to risk, in spite of the fact that only one is enjoying the use of the property.
For instance, the spouse that is not living in the home may be banking on the fact that the ex-spouse will continue to pay the mortgage, should the payments stop, his/her credit will suffer from a house that he/she isn’t even living in. Further, if his/her name is already on a mortgage for a house he/she isn’t residing in, he/she may have difficulty qualifying for another mortgage.
Additionally, the spouse living in the house is unable to sell the house without the consent and signature of the ex-spouse who is on the mortgage. Further, if both spouses are on the mortgage and deed, both stand to gain financially should the house sell (regardless of which spouse has actually been paying the mortgage). Ultimately, it is not a great idea to have a divorced couple maintain both names on a mortgage in a home where just one ex-spouse is living.
Consult with a Family Law Attorney
With any legal questions about separation, divorce and their impact on personal assets, it’s in the best interests of all involved parties to consult the advice of a family law attorney.