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  1. #1
    shumaker8888 is offline Junior Member
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    Cool Taking my name off the house during seperation

    What is the name of your state (only U.S. law)? IL

    I am separating from my husband after 14 yrs of marriage. I went to buy another house but had to add him to the deed so I could purchase it with the equity of our house together. He was ok with that but my payment is extremely high. I don't want to rush into a divorce right now, wanted time to think, but I need to get my payment down. The bank told me the only way I could get a mortgage loan on this house it to take my name off of our house together. If I take my name off our house together, does that mean I am not entitled to half if we do get a divorce?

    Thanks so much for your help!
  2. #2
    nextwife is offline Senior Member
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    Quote Originally Posted by shumaker8888 View Post
    What is the name of your state (only U.S. law)? IL

    I am separating from my husband after 14 yrs of marriage. I went to buy another house but had to add him to the deed so I could purchase it with the equity of our house together. He was ok with that but my payment is extremely high. I don't want to rush into a divorce right now, wanted time to think, but I need to get my payment down. The bank told me the only way I could get a mortgage loan on this house it to take my name off of our house together. If I take my name off our house together, does that mean I am not entitled to half if we do get a divorce?

    Thanks so much for your help!
    Taking your name off the HOUSE does NOT take you off the mortgage. That ONLY occurs when the mortgage is paid off (through refi or sale). Until that mortgage is gone, you still retain a shared responsibility for the payments if you are on the mortgage. You really need to both deal with disposal of this debt BEFORE assuming an additional mortgage debt, unless you CAN afford to pay both, should you need to.
  3. #3
    JustAPal00 is offline Senior Member
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    Your husband would need to refinance the mortgage on the old house to get you off the mortgage. The best way to handle the equity is to have him finance the payoff plus 50% of the equity. He then would give you your equity and he would own the house himself. You in turn could put the money down on the new house and lower your payments or do what ever you like with it because it would be yours.
  4. #4
    shumaker8888 is offline Junior Member
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    What if I just have to take my name off the mortgage, but not the house? Am I giving up my 1/2 of the equity then?
  5. #5
    JustAPal00 is offline Senior Member
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    No. The mortgage and the deed are two seperate things. Typicaly your name must be on the deed to be on the mortgage but not vice versa. He would still need to refinance to get you off the mortgage. If you're considering not taking your equity now, it doesn't make a lot of sense unless your husband has enough cash in his side of the marital assets to pay you your equity if you should end up divorced. Remember if, let's say there is $50k equity today, you would be entitled to $25k. If you end up getting divorced in 5 years and the home has $75k in equity, you would still only be entitled to $25k. It would make more sense to put that $25k on your new home and lower the principal amount. Not to mention if the home were to go down in value and say has $25k in equity, he could argue that the $50k was an over inflated estimate and you could lose some of that money. If you two do work things out, which if there are kids involved I hope so, then you will own two homes and can do what you want with either. You will not have lost anything.
  6. #6
    nextwife is offline Senior Member
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    A bank CANNOT put a new mortgage on a co owned property unless both owners sign.
  7. #7
    LdiJ is offline Senior Member
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    Quote Originally Posted by shumaker8888 View Post
    What is the name of your state (only U.S. law)? IL

    I am separating from my husband after 14 yrs of marriage. I went to buy another house but had to add him to the deed so I could purchase it with the equity of our house together. He was ok with that but my payment is extremely high. I don't want to rush into a divorce right now, wanted time to think, but I need to get my payment down. The bank told me the only way I could get a mortgage loan on this house it to take my name off of our house together. If I take my name off our house together, does that mean I am not entitled to half if we do get a divorce?

    Thanks so much for your help!
    Why in the world did you jump right into buying a house? Why did you add that complication to the whole mix?

    Its too late for you, but for anyone else newly separating or divorcing WAIT. Don't jump right into a real estate purchase.
  8. #8
    JustAPal00 is offline Senior Member
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    Quote Originally Posted by nextwife View Post
    A bank CANNOT put a new mortgage on a co owned property unless both owners sign.
    Both owners do not need to be on the mortgage. It's done all the time.
  9. #9
    mistoffolees is offline Senior Member
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    Quote Originally Posted by JustAPal00 View Post
    Both owners do not need to be on the mortgage. It's done all the time.
    Depends on how the deed is titled, I presume.

    If they each own 50% of the equity, then the one signing the mortgage could only guarantee half of the home to the bank - not to mention the added cost if they tried to forclose.

    If the deed gave either of them the right to pledge 100% of the value (I don't remember the wording), that is possible.

    I suspect that putting both names on the mortgage is far more common, though. When we bought our house, my wife hadn't worked for years and had no plans to go back to work - yet the bank insisted on her signing, as well.
  10. #10
    JustAPal00 is offline Senior Member
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    Quote Originally Posted by mistoffolees View Post
    Depends on how the deed is titled, I presume.

    If they each own 50% of the equity, then the one signing the mortgage could only guarantee half of the home to the bank - not to mention the added cost if they tried to forclose.

    If the deed gave either of them the right to pledge 100% of the value (I don't remember the wording), that is possible.

    I suspect that putting both names on the mortgage is far more common, though. When we bought our house, my wife hadn't worked for years and had no plans to go back to work - yet the bank insisted on her signing, as well.
    Although most homes purchased by married couples are jointly purchased and the mortgage is taken out in both names. Both parties do need to sign the title work at the time of closing, but if one party has poor credit the person with good credit can do the mortgage on their own. I did a bunch that way when I was a loan officer. I also did father son/daughter purchases where the father was helping the son/daughter with bad credit. Both would be on the deed to make the home owner occupied but the father was the only one on the hook for the mortgage.
  11. #11
    nextwife is offline Senior Member
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    Quote Originally Posted by JustAPal00 View Post
    Although most homes purchased by married couples are jointly purchased and the mortgage is taken out in both names. Both parties do need to sign the title work at the time of closing, but if one party has poor credit the person with good credit can do the mortgage on their own. I did a bunch that way when I was a loan officer. I also did father son/daughter purchases where the father was helping the son/daughter with bad credit. Both would be on the deed to make the home owner occupied but the father was the only one on the hook for the mortgage.
    One cannot encumber a house with an enforceable mortgage unless all parties in title sign the mortgage. They might not both be on the note, but they must be on the mortgage else the lien cannot be perfected.

    There are scenarios where one was added to title later and is not on the mortgage, but no lender wants a mortgage on which they cannot forclose in the event of a default. Therefore, the lender will require that all parties in title "agree" to the mortgage going in place by signing the mortgage.
  12. #12
    JustAPal00 is offline Senior Member
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    Quote Originally Posted by nextwife View Post
    One cannot encumber a house with an enforceable mortgage unless all parties in title sign the mortgage. They might not both be on the note, but they must be on the mortgage else the lien cannot be perfected.

    There are scenarios where one was added to title later and is not on the mortgage, but no lender wants a mortgage on which they cannot forclose in the event of a default. Therefore, the lender will require that all parties in title "agree" to the mortgage going in place by signing the mortgage.
    OK, let me make it simple. As I stated, both parties need to be present at closing to sign. The mortgage can be in only the husbands name as long as the wife signs the title work allowing it!

    Now, that had nothing to do with what the OP was asking but people like to split hairs.

    OP, read my first post and it will explain how to keep your equity.

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