Refinancing After Divorce. There are two ways to remove a divorced partner from a mortgage: obtaining a release of liability from the lender or refinancing the mortgage.
Obtain lender approval
If your lender wants to, they have the power to remove someone's name from the mortgage without needing to refinance.
Yes. If the court orders as part of the division of property that the house is yours you will have to take out a new mortgage in your name only on the property and use the proceeds to pay off the loan in both your names. This takes care of having the loan in your name only.
Yes, removing a name from a mortgage typically incurs costs. Refinancing usually requires closing costs of 2-5% of the loan balance, while a loan assumption may cost around 1% plus processing fees. Loan modification costs vary by lender.
In California, if the house was acquired during the marriage, it'll be classified under community property; hence both parties will have equal ownership. However, if one spouse acquired the house through inheritance or as a gift, it belongs to the spouse whose name appears on the title deed.
The price to eliminate names from deeds is contingent on many factors like where you live, the legal fees, and the difficulty of the procedure. Generally, it could vary from one hundred to a few thousand dollars. If both parties agree on the removal and there are no legal complications, the cost might be lower.
If you want to keep the house and don't have enough equity to do a cash-out refinance or the money to pay your ex their share, the solution might be a home equity line of credit (HELOC) or home equity loan.
You can take legal action against them for breaching the agreement you both made or seek a court order to force the sale of the property. It's important to consult with a lawyer to understand your legal rights and options and to make the best decisions for your situation.
Legal Remedies When Refinancing Isn't Feasible
If the spouse who wishes to keep the home cannot successfully refinance it after the divorce, several legal remedies and options may come into play: Sell the Home: One option is to sell the marital home and divide the proceeds as agreed upon in the divorce settlement.
You can take over someone else's mortgage using an assumable mortgage. Assumable mortgages are a great way to get into a home if you're looking to buy or sell, or even just do some property flipping.
Loan assumption is when you take over full responsibility of the mortgage loan. This removes your spouse's name from the loan, leaving you as the sole remaining borrower.
If Your Spouse Isn't Paying the Mortgage
The bottom line is that your soon-to-be ex remains just as financially responsible for your shared mortgage as he or she was before (even if only you are living there while your divorce is pending).
However, in a community property state (like California) – and even some states without community property laws – a home purchased during the marriage is considered marital property, regardless of whose name appears on the deed.
If you talk to the mortgage company and present them with your divorce decree and a quitclaim deed, many lenders will remove you and leave the loan in your ex's name only. This is true for many lenders, including loans underwritten by government organizations. This is known as a release.
Most men experience a 10–40% drop in their standard of living. Child support and other divorce-related payments, a separate home or apartment, and the possible loss of an ex-wife's income add up. Generally, Men who provide less than 80% of a family's income before the divorce suffer the most.
No, a person is not "automatically" entitled to half the equity in real estate just because they purchased the property with another person. The amount of each owner's fair share of the equity may need to be determined by a judge if the two people can't agree on the amounts.
If the person to be removed is alive, then you will need a court order or their cooperation such that you can record a new deed that removes them. Quitclaim and warranty deeds are common solutions. If an owner of a property has passed away, you will need to transfer the property to the living owners.
You might own a property with your name on the deed, but the mortgage—the loan used to buy the house—is in someone else's name. This can happen if you inherited a house, received it as a gift, or shared it from a previous relationship.
: to release or relinquish a legal claim to. especially : to release a claim to or convey by a quitclaim deed.
Does It Matter Whose Name Is on the Mortgage in a Divorce? While the name on the mortgage can influence who is responsible for the debt, it doesn't necessarily dictate how the property is divided.
Birdnesting divorce (also called bird's nest custody or just birdnesting) is a living arrangement that keeps children in the family home while parents take turns living there. When a parent is not in the family home, they live elsewhere.
Divorcing couples have several options for dealing with their mortgage: Sell the home and use the profits to pay off the home loan. Maintain the mortgage jointly and use the house as an investment property. Relinquish the mortgage to one partner.