Posted December 22, 2022 in Blog / Education

Divorced?

If you are reading this you are probably thinking of ending your marriage, in the middle of divorce proceedings, or have completed the divorce process. That’s unfortunate. 

Perhaps you and your ex-spouse or soon-to-be ex-spouse purchased a home together as most couples do. Most likely, you were both on the application for the mortgage loan and you took title to the home as joint tenants. 

During the divorce process, a decision needs to be made. Either someone retains ownership or you mutually agree to sell the home. When one party makes the decision to keep the home the other party relinquishes their rights to the home. 

The process of removing one party from the deed only requires a simple form and a recording fee. 

Then the next question arises. “How do I get my ex-spouse off the home loan?” The answer is….it’s not that simple. 

The original mortgage lender approved the mortgage note using a joint credit report, dual income(if applicable), mutual assets, and etc. The note is an agreement that both parties take responsibility for monthly payments until the note is paid in full. The note is paid in full by either selling the home or refinancing the loan. Understand, the person retaining the home needs to qualify for a new mortgage individually and accept new terms.

It is important that the person retaining the home should predetermine if they qualify before agreeing they will refinance the loan, hence, removing the ex-spouse from the financial obligation. Commonly, the judge will allow a 6 month time period for the refinance to take place after the divorce is complete. 

One last thing to keep in mind, the refinance loan cannot close until the divorce is finalized and a court judge has signed off on the decree and stipulations. One cannot legally transfer title during a pending court case or lawsuit.

If you need additional consultation or information please contact one of our highly qualified mortgage loan originators and they will provide you with all of the necessary information and help you navigate a sensitive situation.