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Mortgage Solutions for Divorced or Separated Individuals | Keeping the House

Swing In Hillsborough County and Tampa, Florida, many separated and divorced individuals are forced with the dilemma of how to keep the current home during settlement negotiations.

Keeping the Home Without An Existing Mortgage:

A quit-claim deed only transfers ownership of the property, which is the easiest way to transfer title from one spouse to another. This is an ideal solution for individuals who do not have a current mortgage on their home.

A quit-claim deed can be prepared by an attorney or divorce mediator and is recorded with the local register of deeds.

Keeping the Home with An Existing Mortgage:

The only way to rid one spouse of a mortgage they are on is to satisfy the current mortgage. If the mortgage is not satisfied, the vacating spouse will still show the liability of the mortgage on their credit report. This means that if the spouse staying in the home makes a late payment, the vacating spouse will still be hit by the late payment on their credit, even if a divorce judgment shows they are not responsible. In addition, the vacating spouse will show this debt on their current liability schedule and may have future issues qualifying for another mortgage. By satisfying the mortgage, this rids the vacating spouse of any financial responsibility on the mortgage and the home.

The option of refinancing the mortgage will satisfy the mortgage debt for the vacating spouse and eliminate future financial issues related to the mortgage.

My job as a Tampa Mortgage Expert is to help divorced and separated individuals make the best decisions regarding your home and financing. It is my personal policy to offer a complimentary consultation to individuals surf the stormy waters of separation and divorce.

Leah M Ross, Personal Mortgage Consultant

~See more mortgage information for Divorced or Separated Individuals in the following articles on My Tampa Mortgage Blog:

Mortgage Income Requirements | Alimony and Child Support Income for Qualification

Posted by Leah Ross ~ Tampa, Florida Mortgage on 07/09/2007 09:00 PM

Comments (37)

tampa divorce, tampa mortgage, keeping the house through divorce, vacating spouse, tampa divorce mortgage

This post has been included in Florida Information Hillsborough County, FL Information

37 Comments on Mortgage Solutions for Divorced or Separated Individuals | Keeping the House

JUL

2007

Leah - this is perfect timing!! I have a friend trying to keep her house...while getting rid of her husband! Is there a way of keeping the same interest rate and taking someone off the note?

Nice, informative post, Leah! I've educated several clients about the ins and outs of this issue.

I checked out your site and it is really impressive. Do you just have that other blog or do you have a fixed website also. I have a typepad site but I am hating my template after I saw how great yours looked. Great post

Susie~ It really depends what her interest rate is now and what type of mortgage they have. If their interest rates are close to current market rates, is it possible we can do a rate/term refinance and keep her close. If they have a government loan, it is possible the mortgage is assumable at the current rate they have. Email me with more info, I am happy to help!

Don ~ It is a deep issue that has to be handled with white gloves. Good to know there are other professionals out there giving good education!

James ~ Thanks for checking my site. I also have a webiste for buyers at www.searchtampaareahomes.com but I am working to generate more on my blog now. Typepad can be a bit hard to handle, but I am learning more every day!

Good post...have a lot of these issues with some of my borrowers!

Hey Leah,

Good post. Have you considered getting your CMPS Designation? Do you recommend Xinnix?

Leah.... these are some great tips. But you confused me slightly when you said : in regards to quick claim deeds This is an ideal solution for individuals who do not have a current mortgage on their home.

If they did have a mortgage prior, they would be on the deed. If they didn't, how could it be their home? Sorry, maybe it's late, but am I missing something?

You also mentioned that if they are a vacating spouse, that the mtg debt will still be theirs. Not if it is in a divorce decree. The only thing that they would be affected by is if the ex is late on the payments. \

But seriously.... overall, this is some good information. Sorry that I am lost on one of them. ;o) PS... and I like how you do these mini blogs on specific topics. Something that I am working on. Good job.

jeff belonger

Well Leah, I can see why you are the Tampa Mortgage expert! You do seem to know your stuff, and I always appreciate that in a lender. I get nervous when people use lenders that I don't know!

I see a lot of people quit claiming property, and I wonder about tax implications, especially when Mom and Dad put an adult child on title. It seems an easy way to do things, but I wouldn't without my tax person approving. With a divorce that is all worked out, but so often it isn't thoroughly thought out.

I noticed this in the past with some of my clients..they quit claim and then put the house up for sale.

Quit claim deeds are very cheap...they can be anywhere from $10-$100 usually.

Fantastic post!!! With soo many divorces in this day & age, few people do not know there are options to save the property.

Leah - this is the type of useful information we can all benefit from - thanks so much!

JUL

2007

Leah, Thanks for the information, I wish I knew this a few months a go when a friend was in need of some help.

Divorce can be such a pain (been there done that got the t-shirt to prove it) in today's world of refi's are you seeing people splitting when they are upside down and really there is no option of one getting a refi?

Jeff this can vary from state to state depending on if you are in a "Lien theory" or "Title Theory" state. In Florida we get a 'Deed' as soon as we buy the home, and can "mortgage" the property simultaneously. In some states they require the Mortgage or liens to be satisfied in full before you can get a deed (kind of like a car title that you get after the car note is paid off).

There is actually a provision in the mortgage that people cannot 'Quit Claim' their interest and rights the property so long as that mortgage exists (however people have done it). The lender can also call that note due (Payable in full) and can create Nasty title credit issues if the other spouse doesn't pay etc.

THIS IS SOME REALLY GREAT ADVISE LEAH, and a Fantastic post!!!

I am relieved to share that I didn't keep the husband, the mortgage or the house. LOL

Arevaderchie baby!

Leah, great information. It is always a tough situation. I like Chris Griffith's comment. Thanks for informing us about the divorce issues, I usually tell my divorcing clients the same thing.

Leah- Great post. I had a seller that got a quit-claim deed and the attorney and told her to go down to the court house and get it recorded. Well, she never did record it. The ex-husband moved out and decided not to pay his bills. The credit company's put a lean on the home and ended up costing her an extra $4,000 at closing. If she would have had it recorded it would only cost her around twenty bucks.

Leah, I have seen first hand what divorce can do to someones credit score. People tend to act out of emotion and don't consider the fact that they are trashing each others credit. This can have a long lasting effect for both parties. I agree it is best to consult with a Mortgage Specialist about how to handle each individual scenerio.

Leah,

You have a great amount of info for people who would be going through a hard time, and all they would need is good answers..

Great post...

Tom Weiss

Steven ~ Thanks for the comment. Unfortunately there any many individuals facing these issues.

Jason~ Yes, I have considered by CMPS, very soon! On Xinnix, I would highly recommend it. Especially for new loan officers, it is an amazing course.

Jeff ~ Clarification on the quit claim deed. If they don't have a current mortgage and both names are on the deed, a quit claim deed could be a simple solution to taking one borrower off the deed and transfering full ownership to the other borrower.

On the vacating spouse, if their name is on the mortgage, their name will remain on that debt and show on the credit report, even if there is a divorce decree stating it is the other spouses responsibility to make the payments. The only way to rid the vacating spouse of all financial obligation is to satisfy the mortgage.

Hope that doesn't make it more confusing ;) Thanks for the comments, even the late at night ones!

Joanne ~ Thanks so much for the comment and the kind words. I agree that the tax implications should be discussed with the attorney and a CPA prior to any final agreement. I believe it takes a team of professionals to successfully help divorced individuals manage the settlement!

Neal ~ Great point! Quit claim deeds are a very low cost option.

Open Home ~ Agreed! If it makes sense to keep the house, the options should be explored.

Ines ~ Thanks for the comment! I am glad it is of benefit~

Mana ~ It's scary, but most of us all know someone who is going through the troubles of divorce or separation at some time. It will be good for us all to share information for such friends and family members in the future!

Thesa ~ Great question. It's really a mixed bag. I recently had a client in that situation and the other spouse agreed to stay on the mortgage, although he was no longer living in the property. Luckily, they are still on friendly terms!

Leah.... it makes more sense now. Just the way it was written, it almost sounded like if they lived in a house, but didn't own it. Maybe it was late at night. or put a disclaimer in there stating that this is if you only own the home. I am sure that you have received calls before from people looking for personal loans, who rent.

And yes, I agree and know that the spouse is still liable for the debt, good or bad, even if they are divorced. I was just reiterating that they can still buy a house or refinance even if so, as long as it's stated on the divorce decree. That's all. thanks for the clarifications....

Katrina ~ Good explanation. Really the quit claim option I provided was more directed for individuals that do not have a current mortgage. Thanks for the comment!

Chris ~ LOL~ Way to get out nice and clean! Now onto round two?

Missy ~ Keep spreading the news!

Robert ~ Good story to share!! We need to protect our investments. Too bad that was a costly mistake for her!

Michael ~ You are so right. I have seen it many many times. The biggest thing for people to understand is that is DOES affect their credit. If they are on the mortgage or credit cards or a car payment, jointly with the other spouse and that spouse doesn't pay....it will damange their credit too! Regardless of a divorce decree.

Tom ~ Thanks for the comment Tom and the kind words!

Heck no!

Jeff ~ Good points, I will put a disclaimer in above.

Chris ~ What about your alimony plans? ;)

Crap. I forgot the alimony, too.

Leah - I really appreciate this post and as you and I have discussed Clearwater Florida ranks #1 for divorced people - so I like having helpful solutions to financially and emotionally stressful situations. Great job - keep it coming.

Cyndee ~ I am trying to provide as much useful information as possible for consumers in our area! Thanks for the comment!

http://www.searchtampaareahomes.com/ That link is broken. Thought I would let you know. Great blog though

Leah as Cyndee pointed out a divorce is emotionally stressful as it is. Finding out later you can't purchase a home because you are still on the old mortgage is just another stress added on top. Good information for divorcing individuals to keep in mind.

JUL

2007

James ~ Thanks so much for pointing that out for me....I have changed the link to my outside blog www.tampabaymortgageblog.com

Ashley ~ so true! It's good to know these things in advance to prevent more emotional stress down the road.

JUL

2007

Great info Leah - you would be a great resource for anyone that finds themselves in this situation. Knowing they're working with a mortgage professional that tells the truth, does what they day and really cares - You are our Clearwater / St Petersburg Home Loan Expert - am we've worked with most of them out there!!

JUL

2008

Leah great post very interesting. Good to see posts seeing the other side of this divorce coin. I was reasearching the blogs on this area to see if it really is becoming more commnon and what is involved etc . Thanks .. http://www.appraiserking.com/Divorce

MAR

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Alanna

http://www.craigslistguide.info

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