How To Get Your Ex-Spouse Off Your Mortgage

How To Get Your Ex-Spouse Off Your Mortgage After a Divorce

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In this blog, we will cover and discuss how to get your ex-spouse off your mortgage after a divorce. Divorce happens to the best of us. The divorce rate has declined over the past ten years but the divorce rate remains slightly under 50% at 44.2%. Data was based on the U.S. Census where for every 6.1 people who got married, 2.7 people ended up in a divorce.

Most married people purchase a home together and will be on the mortgage as borrowers and co-borrower. However, with a divorce, many people are concerned about how to get your ex-spouse off your mortgage.  Normally, in a divorce, the judge awards the house to one of the spouses. The person being granted the home will be responsible for the mortgage against the house.

Advice on How To Get Your Ex-Spouse Off Your Mortgage After a Divorce?

We will cover and discuss how to get your ex-spouse off your mortgage after a divorce in the following sections of this blog. But what happens if the house is under both spouses’ names? What happens if you are the spouse who is not awarded the home but your name is on the mortgage?

What happens if the ex-spouse who was awarded the house is late on the mortgage payment and you are the co-borrower on the mortgage? Your concern is how to get your ex-spouse off your mortgage after your divorce, right? Just because a judge grants you the home does not relieve you from the title of the home or separate you from a joint mortgage loan. You need to settle the separations of the title of the home and the mortgage on your own.

How Can You Get Your Ex-Spouse Off Your Mortgage And The Title of Your Home?

You can easily get your ex-spouse off the title of the home with a quit-claim deed. However, how to get your ex-spouse off your mortgage?? We will explore several options on how can you get your ex-spouse off your mortgage after a divorce. This can be a problem and need to get addressed. Just because you got awarded the home does not mean the ex-spouse gets off the title and off your mortgage. In this blog on how to get your ex-spouse off your mortgage, we will cover and discuss the quickest and best way how to get your ex-spouse off your mortgage.

What Happens To a Mortgage When People Get Divorced?

Life can take many different turns and twists. One of life’s unfortunate (or maybe not so unfortunate!) events is when you and a spouse decide to go separate ways and divorce. Statistically, about half of all marriages end in divorce. While going through the process of splitting, there also comes the point when you need to look at dividing the finances, and this can be complicated.

Chances are that you and your spouse had purchased a home together, and now you have to address the issue of both of you being on the mortgage. Divorce is not considered a release from debt. You are both on the mortgage with mutual debt, which will need to be resolved. It is important to know how to get ex-spouse off your mortgage after divorce to avoid future liability.

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Who Is Responsible For The Debt of a House After a Divorce?

First, you will both need to come to an agreement about who will be responsible for the mortgage debt and who will keep the house. This is not always an easy task. It can be complicated with lawyers and court battles. If the split has been amicable, perhaps you have just discussed it, and it has been decided. Once you have both agreed, you will need to confirm who is currently on the mortgage and title. You may not know this, but a person can be on the house’s title without being on the home’s mortgage.  

How Is The House Split During a Divorce?

The court can decide for you if you and your ex-spouse can’t decide how to split all the property and assets/debt. Even if you have chosen, you still need the divorce decree in order to proceed with settling the property issue. Additionally, the mortgage lender still has the authority to decide who is liable for the mortgage debt based on who is on the loan. This means that even if the divorce decree states that one spouse will get the house if you are both on the mortgage, the lender could decide that they will not alter the original mortgage. 

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How To Get Ex-Spouse Off Your Mortgage and Title After a Divorce?

The title shows who legally owns the property. In order to remove the ex-spouse from the title, you can complete a quitclaim deed. A quitclaim deed is a legal document used to transfer property from one person to another. Although these are legal documents, they do not provide much buyer protection, which is one reason why they are typically done between family members. These deeds can be done in a short amount of time and only show the grantor’s interest at the time of the deed’s execution. It will not show who legally owns the property.

How Do I Quit Claim My Ex-Spouse Off The House After a Divorce?

A quitclaim deed can be prepared by an attorney, or there are fill-in-the-blanks types of forms. Almost all quitclaim deeds will retire that the grantor signs them. In order for this deed to be valid, it needs to be delivered and accepted by the grantee. It is generally acceptable to have the grantee put in writing that they have received and accepted the deed. It’s also a good idea to have that notarized.

The final step would be to have the quitclaim recorded at the office of the recorder where the property is located. It is important to remember that a quitclaim can affect title insurance. Additionally, you need to address the issue of who is responsible for the mortgage before you execute a quitclaim. Once the quitclaim is complete, an individual could be responsible for the debt without input on what happens with the physical property! 

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Which Spouse Is Responsible For The Mortgage After A Divorce?

Check the mortgage to see who is on it, telling you who is responsible for the debt. If only one person is on the mortgage, then that individual is responsible for paying the mortgage debt. If both of you are on the mortgage, then both of you are responsible for paying the loan. If both people are on the loan, then you should get the ex-spouse who no longer has ownership of the house off the mortgage loan. 

How To Get Ex-Spouse Off Your Mortgage After Divorce With an Assumable Mortgage

A mortgage transfer or mortgage assumption is when you transfer the mortgage from the original owners to one or the other. In order to remove a spouse from a mortgage, you need to ask your lender for a release of liability. This is not always easy as it is up to the lender to decide if they will grant the release. Many people need to refinance to get rid of the liability of the ex-spouse. However, the person refinancing needs to be able to qualify for the refinance on their own credit and income. Getting your spouse who got the house assume a the current mortgage is another way on how to get ex-spouse off your mortgage after a divorce.

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Will An Assumable Mortgage Release My Liability After a Divorce?

The release of liability would remove the debt from the spouse’s credit report and ensure they were not at fault if payments were not made on time. A lender might not grant the release if the spouse’s credit is poor or if the spouse will not have enough income to make the payments. Remember that if you are both on the mortgage, it was given to you because the two of you together applied. Additionally, there will no doubt be transfer fees involved in this process. 

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What You Need To Know About Refinancing After a Divorce

The only other option you have to remove your ex-spouse from the mortgage if the release of liability was not granted is to refinance. This will cost you, and the lender doesn’t just waive fees because of a divorce. In order to refinance, the individual must have equity in the home and not owe more than it is worth in the current market. If you are able to refinance, this creates a new loan in the name of the one spouse.  

Can I Settle Splitting The House With Cash-Out Refinance With Ex-Spouse During Divorce?

A cash-out refinance can be one way to get money from your equity to buy out your spouse for their share of the mortgage. A cash-out refinance is when you take out a new mortgage loan for a more significant amount of money than the existing mortgage. You then get the cash difference between the two loans. There are no restrictions on what you use the cash for. Most lenders will require you to keep 20% equity in your house after the cash out to keep the loan-to-value ratio at 80%. This also saves you from having to pay mortgage insurance. 

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Can I Get Cash-Out Refinance During a Divorce?

These cash-out-refinance options are available for conventional and government-backed loans (VA, FHA). However, be aware that there may be requirements that you have owned the home for a minimum amount of time, although there are some exceptions due to divorce. You will need to inquire with lenders to see what the requirements are. 

Remember that if you are financing to get one spouse off the mortgage, lenders will want to see that the spouse refinancing has an acceptable credit score and can make the payments. Being able to refinance with descent credit is important on how to get ex-spouse off your mortgage after a divorce.

Can My Ex-Spouse Refinance Without Me During Divorce?

Sometimes, a person going through a divorce will have a rude awakening when they check their credit score. Divorce happens typically because two people have gone through some rough times, whether financial or emotional. Credit reports take many factors into account to get your score. The type of debt, how long you have had loans, and whether you have missed or had delinquent payments are all considerations.

Refinancing To Get Ex-Spouse Off Your Mortgage After Divorce With Bad Credit

If you have been distracted by the goings-on of life and the end of a marriage, you need to take control of your score as quickly as possible to be in the best place financially to refinance. If possible, you can employ a credit repair professional in order to get on track. Another way to improve your score is to dispute any inaccuracies.

The dispute can be reported to the Credit Bureau, and although it takes time to resolve it, it can be done. A lender might not want to work with you until the divorce is finalized, so there is some time for you to address your score. Depending on which loan options are available to you, you will generally need a credit score of 620 to refinance. 

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What Loan-To-Value Is Required To Refinance After Divorce To Get Ex-Spouse Off Mortgage

Loan to Value (LTV) is a ratio used by mortgage lenders to determine if you will qualify and how much you will need to pay on down payments. It’s the proportion of the value of an asset (the home) that the lender is willing to finance. To refinance after a divorce, typically, a maximum loan to value ratio of 97% for a conventional loan is required and 97.75% for an FHA Loan. 

What Is The Debt-To-Income Ratio Cap Required To Refinance House After Divorce?

The debt-to-income ratio (DTI) is a percentage of how much you earn each month compared to how much debt you owe. In this debt are your monthly recurring bills, including credit card bills, student loans, mortgages, etc. In most refinancing situations, you will need a debt-to-income (DTI) ratio of no more than 43% when refinancing after a divorce.

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How To Get Ex-Spouse Off Your Mortgage After Divorce By Selling House

Another way how to get ex-spouse off your mortgage after a divorce is by selling your house. If none of the above work, the only other option is to sell the home. This would be an option if neither spouse could decide who would take over the house and mortgage or if neither spouse qualified for a refinance. This is helpful if you both need to pay off existing debt as well. However, you need to be aware that in order to sell, you will need to have a written decree on how you will split the proceeds from the sale prior and also how you plan to split the cost of expenses as they arise. 

The road to sorting out the mortgage and title situation can be bumpy after a divorce. If you feel like you could use some assistance, there are many mortgage brokers and financial planners that can assist you. 

This guide on how to get your ex-spouse off your mortgage after a divorce was published and updated on September 23rd, 2022

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