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Question about divorce and mortgage/home ownership.

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half-past

Junior Member
NJ-- My husband and I are getting ready to get an "irreconcilable differences" divorce. We are both strangely amicable and have divided the property fairly between us with zero disagreements. I am to get our home (which I've paid on the past 16 months and put the down payment on) and he's to get his 401k. The problem is the the mortgage (which has another 10 years left), is solely in HIS name because I was having credit difficulties at the time of refinance. I signed a quitclaim dead, etc. Now that we are divorcing, I am TRYING to avoid incurring the massive (2k-3k) fees the mortgage company wants to charge to put the house in my name. Does anyone know of a premade document that I can get that states I am and have been financially responsbile for my home and it legally belongs to me regardless that his name is on the mortgage? OR, would it be possible to draft such a letter than states this and guarantees he can't claim ownership of the house, and will transfer the title when the mortgage is paid in 10 years? I don't know how amicable we'll be in 10 years and would hate to take the chance that he'll turn into a SOB by then.

Thanks in advance!
 


LdiJ

Senior Member
NJ-- My husband and I are getting ready to get an "irreconcilable differences" divorce. We are both strangely amicable and have divided the property fairly between us with zero disagreements. I am to get our home (which I've paid on the past 16 months and put the down payment on) and he's to get his 401k. The problem is the the mortgage (which has another 10 years left), is solely in HIS name because I was having credit difficulties at the time of refinance. I signed a quitclaim dead, etc. Now that we are divorcing, I am TRYING to avoid incurring the massive (2k-3k) fees the mortgage company wants to charge to put the house in my name. Does anyone know of a premade document that I can get that states I am and have been financially responsbile for my home and it legally belongs to me regardless that his name is on the mortgage? OR, would it be possible to draft such a letter than states this and guarantees he can't claim ownership of the house, and will transfer the title when the mortgage is paid in 10 years? I don't know how amicable we'll be in 10 years and would hate to take the chance that he'll turn into a SOB by then.

Thanks in advance!
You really have no choice but to have the mortgage put into your name. Its not fair to him to tie up his credit for the next 10 years (and I would advise him strongly not to accept that).

Its possible that it might be less expensive to shop around for mortgage companies and to treat the transfer as a sale to you at the balance due on the existing mortgage. Normally a below market sale would result in potential gift tax consequences to your husband...but because this is part of a marital asset division that waives the tax consequences.

However if your credit is still shakey and that's the reason for the 2-3k in fees...that's not your husband's fault, and that's something that you would need to absorb. However, if you shop around the fees may be able to be rolled into your existing mortgage, since obviously you will have significant equity in the home from the get-go.
 

half-past

Junior Member
Actually, my husband has agreed (through our negotiations) to pay for any fees associated with the transfer of sale...I wanted to save us both money, so while good, your advice doesn't really apply. While I appreciate your direction, all I want to know is whether or not it is possible, not if you advise it or what is "fair" to him, as the personal details of our dissolution factor into this transaction significantly. Let's just say he's amicable to do whatever needs to get done to give me the house with the least immediate financial burden to both of us.

Thanks!
 

nextwife

Senior Member
A refinance is TRULY the only way you should do this. Shop closing costs- I know in my mareket, total refi fees can often be had well under $1000. I do closings between divorcing spouses who are refinancing one off a debt all the time - and I know, at least in our market, the cost of handling the deed tranfer papers is under $200.

The problem is twofold for him, even if he does not actually yet know or understand the implications:

A. His credit score and borrowing power will be severly impacted due to having an open mortgage in which he is still legally liable. LIke it or not, that is how mortgage lending works. YOU and a court CANNOT legally remove his liablity for an open mortgage- the lender is not a party to the divorce. IT is not possible.

B. If you default, his credit gets ruined.

And YOUR negatives for waiting to complete the finance/transfer of ownership (and there is NO reason he should agree to give you a quit claim while still legally liable for the mortgage.

So, say you get him to agree to wait 10 years, stay on title and give you a QC when the mortgage is paid off? Potential problems:

A. Any liens or judgements filed against him in the next 10 years COULD attach to the real estate, diminishing the equity. Say, he gets in an accident, and ends up in a coma, running up hundreds of thousands in medical costs, for example?

Truly. if you want the house - do it neat and clean. Get him off both the debt liability and the ownership! INterst rates are very acceptable right now. Any other way could come back to bite ya!
 
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