Congratulations on successfully navigating your way through a tricky divorce from your one-time spouse. Now that you can say you have an ex, you need to tidy up some details. Like that pesky mortgage on that fabulous Virginia mansion … or ranch house … or bungalow. Big or little, your house had both your name and your ex’s name on the mortgage. You need to change that. But how?
It’s In Ink
Your two names appear on the mortgage with a lender and those two names shall remain on that document forever. Or until you do one of two things:
- Ask your lender to release you from the mortgage
- Refinance the house in your name alone
The ink on the original mortgage paper will not come off, even if you try using an ink eraser. Your first and easiest path forward is to speak with the lender. Say you still have $350,000 on the mortgage. You might think that means you are liable for only $175,000, but the lender does not see it that way.
With your ex’s name on the mortgage, your ex potentially owes $350,000. With your name on the mortgage, you potentially owe … $350,000. Why? If one of you cannot pay, the other one does. If one of you skips out, the lender still has the other signer to turn to, and that, sir, is you.
Keep in mind four reasons your lender may not go along with this scheme:
- You greatly increase the lender’s exposure when you halve the number of borrowers
- Your ex’s credit history may work against your plan, if you are the better credit risk
- Your mortgage is likely already in a mortgage pool where is has been rebundled as a mortgage-backed security; the lender does not want to complicate its presence in the pool
- The lender has zero incentive to remove you from the mortgage
Given all that, you can still approach the lender, especially if you have an established history with the company, it is a small-town credit union, an independent bank, or a savings and loan. (Yes, savings and loans still exist, with some 627 of them in operation in 2020, according to the FDIC.)
If you have the financial resources to refinance your mortgage in your name alone, you can then assure yourself that your ex’s financial woes do not threaten your creditworthiness or your future financial stability.
Even if a refinanced mortgage stretches you a bit at first, this is a worthwhile way to rid yourself of the potential for financial ruin. Your ex could completely devastate your own credit history, and some exes do this deliberately even at the cost of their own credit scores.
What About a Quitclaim Deed?
A quitclaim deed is a legal document that releases a person’s interest in a property with no warranties of that person’s interest or rights in the property.
Say Yosemite Samantha is in partnership with a certain B. Bunny and together they are prospecting for silver. B. Bunny is fed up with the dirt and dust and wants to travel south for duck season. He has his attorney draw up a quitclaim deed to cede his rights to the silver mine, leaving it all with Yosemite Samantha. His claim on the mine is no more, and he can wipe his gloved hands of the whole enterprise. (Of course, Yosemite Samantha strikes silver the day after B. Bunny leaves, but that’s another story cartoon.)
Since Yosemite Samantha and B. Bunny were not legally married but only business partners, they had no need for a mortgage on a marital home. You, however, differ from Yosemite Samantha and B. Bunny in three key ways:
- You and your ex were married
- You and your ex share the marital asset of a home
- You and your ex are not cartoon characters
A quitclaim deed may seem to get you out from under the yoke of home ownership, but it will not remove your name from the mortgage. If your ex becomes delinquent with mortgage payments, the lender can still seek you out to collect the debt.
The quitclaim deed may seem to protect you, but what it really does is protect your ex from any future claim you may want to make on the one-time marital property. You have limited your options, while leaving yourself unprotected from the lender’s actions to collect a debt.
No matter the path you choose, your Virginia family law attorney is a good ally and an excellent resource for legal advice.
At The Firm For Men we are always ready to answer your questions, large and small, about family law. We specialize in assisting Virginia’s men with separation, divorce, and property settlement. We can help you emerge from a broken marriage as a whole, happy man. Contact us today or telephone our Virginia Beach family law office at (757) 383-9184 to learn more about property settlement and other family law matters.