Mortgage Solutions for Divorced or Separated Individuals | Keeping the House

By
Mortgage and Lending with Your Tampa Bay Mortgage Source

SwingIn 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:

Comments (36)

Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate
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.
Jul 09, 2007 11:13 PM
Robert Schwabe
EXP Realty - Orange Park, FL
Orange Park Real Estate
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. 
Jul 10, 2007 01:17 AM
Michael Delp
Mortgage Pro - Telford, PA

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.

Jul 10, 2007 01:49 AM
Thomas Weiss
Thomas R. Weiss - West Palm Beach, FL

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

Jul 10, 2007 03:17 AM
Leah Ross
Your Tampa Bay Mortgage Source - Tampa, FL
Tampa, Florida Mortgage

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.

 

 

Jul 10, 2007 03:31 AM
Leah Ross
Your Tampa Bay Mortgage Source - Tampa, FL
Tampa, Florida Mortgage

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!

Jul 10, 2007 03:36 AM
Leah Ross
Your Tampa Bay Mortgage Source - Tampa, FL
Tampa, Florida Mortgage

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.

Jul 10, 2007 03:40 AM
Leah Ross
Your Tampa Bay Mortgage Source - Tampa, FL
Tampa, Florida Mortgage

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!

 

Jul 10, 2007 03:43 AM
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

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....

 

Jul 10, 2007 03:45 AM
Leah Ross
Your Tampa Bay Mortgage Source - Tampa, FL
Tampa, Florida Mortgage

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!

Jul 10, 2007 03:49 AM
Chris Griffith
Downing-Frye Realty, Bonita Springs, FL - Bonita Springs, FL
Bonita Springs Listing Agent
Heck no!
Jul 10, 2007 03:51 AM
Leah Ross
Your Tampa Bay Mortgage Source - Tampa, FL
Tampa, Florida Mortgage

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

Chris ~ What about your alimony plans? ;)

Jul 10, 2007 05:55 AM
Chris Griffith
Downing-Frye Realty, Bonita Springs, FL - Bonita Springs, FL
Bonita Springs Listing Agent
Crap.  I forgot the alimony, too.
Jul 10, 2007 06:22 AM
Cyndee Haydon
Charles Rutenberg Realty - Clearwater, FL
727-710-8035 Clearwater, Beach Short Sales Luxury Condos &Homes
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.
Jul 10, 2007 09:22 AM
Leah Ross
Your Tampa Bay Mortgage Source - Tampa, FL
Tampa, Florida Mortgage
Cyndee ~ I am trying to provide as much useful information as possible for consumers in our area!  Thanks for the comment!
Jul 10, 2007 11:56 AM
James Hoben
Barnstable, MA
http://www.searchtampaareahomes.com/ That link is broken. Thought I would let you know. Great blog though
Jul 10, 2007 03:12 PM
Ashley Drake Gephart
Drake Intel Group - Albuquerque, NM
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 10, 2007 03:15 PM
Leah Ross
Your Tampa Bay Mortgage Source - Tampa, FL
Tampa, Florida Mortgage

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 11, 2007 01:27 AM
Jack Haydon
Charles Rutenberg Realty - Clearwater Beach, FL
Clearwater Beach Condos - Real Estate Homes for Sale
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 15, 2007 09:07 AM
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Alanna

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Mar 27, 2009 08:54 PM
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