Can I Take My Ex’s Name Off the Mortgage During a Divorce?

Getting divorced is difficult. Whatever the circumstances, there are bound to be lots of decisions to make regarding the split. One of the biggest: What to do with the house?

Options that you think may be your best move may actually hurt you in the long run, while an option you don’t understand may be the choice you should make. Let’s look at the most common questions we get about handling the house and mortgage during a divorce.

What Should We Do Before We Split?

Many divorces are contentious, making it seem impossible to communicate. Take a deep breath and start a conversation about the house and the mortgage. Do either of you want it, or would you rather sell it? Is there equity you need to split? Can you or your spouse afford the mortgage payment on your own? Settling these decisions early helps pave the way once the divorce proceeds.

What Is a Quitclaim Deed, and How Can We Use It?

A quitclaim deed is an agreement between parties that transfers one’s ownership to the other. During a divorce, one spouse can sign a quitclaim deed giving their ownership rights to the other spouse. Remember, however, that this covers the property but NOT the mortgage loan. If both spouses’ names are on the mortgage, they are still both responsible for the repayment of the debt.

Should We Refinance?

If one spouse is going to keep the home, the other spouse needs to make certain their name is off the mortgage. This is why you refinance. The thing to remember here that many divorcing couples don’t realize is that divorce decrees don’t supersede other contracts. For example, the divorce decree may say she gets the house, but if your name is still on the mortgage, you’re ultimately still responsible for the debt.

What If Neither of Us Can Afford to Refinance?

Unfortunately, many couples who split up can’t afford the closing costs and other fees to refinance their home loan. The first option in this case is to sell the property. If that can’t be done, the agreement on who gets the home, and pays the mortgage, needs to be in writing. This isn’t ideal. For example, if he keeps the house, and they agree that he pays the mortgage, but he doesn’t, the bank can still go after her for their mortgage. After all, her name is still on the loan. If she has their agreement in writing, she can turn around and sue him, but this is still a stressful and last-ditch option. This is especially fraught with problems if it’s a bitter divorce.

Does the Type of Mortgage Loan Make a Difference?

Sometimes it can. For a VA loan, the non-veteran spouse loses all rights to the loan after the divorce. If the non-veteran spouse keeps the house, the only way they can keep the loan is if the veteran spouse remains on the loan. If the veteran wants to buy another home, however, this option won’t work because he or she can only have one VA loan at a time.

Another type of loan that’s affected by divorce is the popular FHA loan. The ex who is keeping the house can refinance to get the other ex off the note. The requirement is they must show proof they have paid the mortgage by themselves for a minimum of six months. Proving this, obviously, takes six months, which can significantly drag out the divorce.

How Will This Affect My Credit?

Your credit score may be affected dramatically, or might not see any impact from dealing with your home. If the mortgage continues getting paid on time, by you or your ex, your credit score shouldn’t move much. However, if both names stay on the mortgage loan and the payments are late, you will see a big credit score decrease. This is why it’s so important to get the home out of your name if you are no longer going to be living in the house.

Make all your payments on time and avoid taking on any new debt, so you can protect your good credit history.

How Soon Can I Buy Another House?

Buying a new house largely depends on how you manage your mortgage during your divorce. If you both agree to sell your home, you are free and clear to purchase another one, providing you have a high enough credit score and income. Leaving your name on your previous mortgage can hinder you from qualifying for another loan, because the debt may be figured into your debt-to-income ratio. This may make you look too risky for lenders to approve you. In addition, if you or your ex failed to pay your mortgage on time during your divorce, your credit score could have suffered, and may hinder you from getting a mortgage loan.

Understanding your house and mortgage options during a divorce is key to making the best decision for you.