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How Can I Remove My Ex Spouse From My Mortgage?

While true love is a beautiful thing, it doesn’t always last forever. 

If you’re working through a breakup, you might wonder what will happen to the property you’ve purchased together. Will it have to be sold so you can divide the profits equally? 

What if you want to keep the property and continue making payments, but your ex just wants to cash out and go?

Your real estate or divorce attorney will help you navigate this sensitive process, but it’s always good to come prepared with an understanding of the facts behind removing your ex from your mortgage. Let’s dig deeper.

The Basics

From the lender’s perspective, anyone who has signed the mortgage is responsible for the repayment of the loan, whether you’re still in a relationship or not. In the event of a default, the lender can pursue any and all parties that are liable, and everyone’s credit score will suffer a hit.

Unfortunately, lenders typically don’t like removing someone from a mortgage. When you applied, your rates and loan amount were determined by a variety of factors, including the combined income, credit, and debt of both borrowers.

Buyers need to have a certain debt-to-income ratio to qualify for a mortgage loan, and in many cases that means relying on two people earning to hit those numbers. This is how lenders judge your ability to make your payments.  

By removing one person from the mortgage, the risk model is changed, and that simply doesn’t work the vast majority of the time. Another thing to keep in mind is that even if your divorce or separation paperwork says your ex is responsible for the debt, your lender will still consider both parties equally liable as the terms of your loan haven’t changed.

Exploring Your Options

In short, there are options for the treatment of the home and its ownership upon the dissolution of the marriage. There are very few options, on the other hand, for the treatment of the mortgage. 

Keeping The Home 

It’s crucial to approach this issue the right way. Once you and your ex have agreed on who’s remaining in the home (if either of you), the person who is relinquishing it (the “out-spouse”) needs to sign a quitclaim deed.

This document, signed by both parties and notarized, will legally transfer all ownership of the property to the person keeping the home (the “in-spouse”). As the quitclaim deed does not remove your ex from the mortgage, only the public record of ownership, it’s time to take the next step.

Asking Nicely

Now, you should reach out to your mortgage lender and explain the situation. It is very uncommon for a loan service to agree to remove a borrower from a mortgage while retaining another. 

However, in some cases, this may work, and it doesn’t hurt to ask. We’ve discussed before the fact that government mortgages (FHA, VA, USDA) are assumable, and in those cases, you may have a bit more success with your inquiry. 

To have your ex removed from the loan, you’ll definitely need to prove your income alone is sufficient to keep making the payments until the loan is paid off, as well as possess a qualifying credit score.

Refinancing  

In the overwhelming majority of cases, you’ll need to plan on refinancing. This may be undesirable, particularly if your existing mortgage has interest rates substantially better than today’s rates, but it’s often the only option that allows one borrower to stay in the home while the other departs. 

You deserve the best possible advice regarding your options for refinancing, so consult with an experienced and compassionate mortgage loan expert who can help you make the most informed choice.

Depending on your unique circumstances, refinancing your mortgage in your name only can have many benefits, as well as mark the beginning of a whole new chapter in your life.

Get Rid of the Home

When the lender is not amenable to simply removing the co-borrower, and refinancing the home is either not viable or not desirable, you’re left with two options:

  • Sell the home
  • Co-borrower files for bankruptcy (please consult with an attorney that specializes in this field before considering this option!)

If unfortunately, neither spouse has the funds or the credit score to refinance and take sole ownership, you’ll need to put the house on the market and split the proceeds according to your divorce agreement. Hopefully, your property will be more valuable today than at the time of purchase, and you can walk away with the funds you need to make a new start.

If you’re currently underwater on your mortgage, don’t despair — you still have options, but be sure to seek advice from a real estate attorney or bankruptcy before committing to a short sale, bankruptcy, or strategic default. These moves can wreck your hard-earned credit.

The Bottom Line

When your relationship has reached its conclusion, you may have questions about what to do with your jointly-held property. 

Your lawyer will offer valuable guidance during this difficult time, but it’s also vitally important to reach out to your current lender to discuss options for removing your ex-partner from your mortgage so you can move on.

If you have questions about refinancing your loan or finding a new home, I can help. I’m a 16-year veteran of the Chicagoland real estate industry, and I can help you find the best financing solution for your needs. Learn more about how I can make this tough process go as smoothly as possible — reach out today!

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