Can My Name Be Taken Off a Mortgage And Have My Ex-Husbands Name Put On The Mortgage?
I'm in a rather unique financial situation and don't know where to turn to for help. My ex-spouse and I owned a business and home together. My ex-spouse is a massage therapist and treated clients in our home. We divorced in February of this year, but the mortgage, which we refinanced a couple of years ago was put in my name only as my credit at the time was better. The title is in both of our names. I asked my ex-spouse to put the mortgage in his name. The problem is that the mortgage will affect my credit and I need to buy a new home. My ex-spouse says the mortgage company will not put it in his name as times are tough and he is not making as much as he used to. I am looking at early retirement and no longer involved in his business. Is there anything I can do to remove my name from the mortgage?
You situation is not unique. Unfortunately, I do not have good news for you.
It is unlikely a mortgage lender will remove a party’s name from a loan. A mortgage is a contract binding all parties to its terms. Indeed, mortgages are structured to not allow parties to come and go, unless under certain conditions.
You and your then-spouse qualified jointly at the time of the loan. You are both parties to the contract. There is no, "We broke up so I want my name off of the loan," clause in any loan contract I have read.
There are two ways to remove a name from a home loan:
- Sell the property
To refinance, the remaining people or person must qualify for a home loan. To qualify for a home loan refinance, the borrowers must have:
- Stable income
- Good credit history
- Property with less than a 100% loan-to-value (or qualify for HARP)
The borrower must qualify for a new mortgage loan to pay off the existing loan on the home. It is difficult for many to qualify for a mortgage lately because banks have made the lending criteria very strict since the collapse in the financial markets. It is even more difficult for individuals who are self-employed to qualify for a loan because banks are requiring full documentation of income, which is oftentimes difficult or onerous for the self-employed.
You mentioned a drop in business that your ex-spouse experienced recently. Depending on the present income, your ex-spouse may find it difficult to qualify for a mortgage refinance.
To find out more about how mortgages work visit the Bills.com mortgage page.
Bankruptcy removes a person’s liability for a loan. If you have liability for a home loan and the other party(ies) cannot qualify for refinance, then consult with a bankruptcy lawyer to learn the positives and negatives of filing bankruptcy, and whether you qualify for a chapter 7 or chapter 13 bankruptcy.
I hope this information helps you Find. Learn & Save.