My wife and I got a house together both our names are on the contract we are not doing that great as a couple to be honest we will be divorcing in the next month after taxes season is over but my questios is she doesn’t want the house can I keep the house with just my name on the contract what do I have to do to avoid any kind of problems later on in the future. Can some one explain to me how this is done ? or what are the sreps to do it
Hi,
I'm sorry to here your going to the big "D" and I don't mean Dallas!
Depending on your communication and her willingness you may be able to remove her from title but leave her name for some fixed period of time on the mortgage loan, if she agree’s to stay on the loan ask your divorce attorney to draft up a mortgage agreement allowing you 2, 3 or 5 years to refinance and remove her name from the mortgage loan. (Mutual Agreement in writing)
If she will not allow her name to be left on anything then you have to refinance or sell to get her off the title and loan!
GR
Yes you can keep the house in your name only. Have your wife notarize a quit claim in your favor, while transferring the deed from both of you to just you.
Her name will remain on the existing loan despite transferring her interest to you. But, if she intends to get new financing in the (immediate) future (and there’s no appreciable equity remaining in the house to walk away from), then she’ll want to eliminate the effective liability by selling the house. She’ll probably need a HUD1 statement demonstrating the sale, along with proof of a sale to any future lender.
As an aside, it is good to use a note servicer (to receive and make mortgage payments on everyone’s behalf) especially in a situation like this, so that neither party has to coordinate user-names and passwords for online access and/or make changes to the online mortgage account. This reduces the need to communicate about details of the loan while her name remains on the note.
Anyway it’s in your wife’s best interest to transfer her interest to you, so that she can more easily and immediately qualify for new financing without showing the old loan as a liability.
Also, you should NOT volunteer, or build in, a refinancing date. As long as you intend on making the payments on time, her credit and future borrowing power will not be negatively effected. Otherwise, why put a fuse up your butt? However, if you’re late with the mortgage and her credit gets dinged, you’re gonna have a problem.
That’s another reason I suggest using a note servicer. You can escrow money just to make sure the mortgage is paid exactly on time every month, but you can make your payments on a more relaxed schedule, knowing the note servicer is making the scheduled payment for you (in advance). And…again, it just keeps the transaction details at arms length with your wife.
Hope it all works out. I am very sorry that you’re dealing with a situation like this. :banghead
I would do the deed transfer asap. Make sure she understands the benefits of this move: easier loan qualifying, credit improvement, effective reduction in liability for repaying the note.
javipa,
I don’t get this. If dachabe’s wife stays on the mortgage loan, it will also show as a liability on her credit report. Even if husband is making the full loan payment, she still has a contingent liability if husband defaults. How does his improve her credit and make loan qualffying any easier?
Just wondering…
That’s a great question. The fact is that the mortgage payment liability is similarly offset by her husband’s continuing payments of it, as if the house were rented to her husband.
In this case, all of the husband’s payments on the mortgage would be credited to her, to again offset the liability on paper.
And yes, if her husband defaults, she’s screwed credit-wise. In fact every payment he makes has an ongoing, potential impact on her credit all things being equal. Meantime, her credit is “improved” not so much by the credit score itself, but by how the new bank both qualifies her for a new mortgage and treats the existing mortgage liability …after the sale of the house to her husband.
Hope that helps, more than confuses. Think of the husband as a renter in her old house, who’s covering the mortgage liability “like a renter.”