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legal separate to get mortgage?

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ehook022258

Guest
Indiana-My wife and I decided to separate. We jointly own a house. My wife owns business property and the monthly rent from that property, in effect, pays our mortgage. I decided when I moved out that rather than rent, it would be good to buy a small place. The mortgage people said that our old house mortgage was an expense against my income and therefore my income to debt ratio was too high to get a mortgage. So I asked the company that has the mortgage on our house if my wife could assume that mortgage, putting it in her name and thereby freeing up me to buy this other place. The mortgage company sent an assumption packet, and to my surprise it said we had to be divorced, legally separated, or from an Incidental Propery Settlement Agreement, Inter Vivos trust transfer, or transfer of the mortgaged property to one of the original co-borrowers under the mortgage note or deed of trust note from one borrower to the other.

How does this work? I am willing to sign our original house to her in order to qualify for the new mortgage. I just am not sure how to do it. Or is this a totally bad idea? I think we will end up together again and I plan to keep the new place in that case as a rental.

Thanks for your help.
 


vrzirn

Senior Member
The only way to remove your name from the mortgage is to refinance the house and give her a quit-claim. She will then own the house as a married woman with that house being her own, separate property. The re-fi may also give you some cash for your share of the equity. She would have to sign a note (second trust deed) for any balance. That would increase her debt load but the interest on the note will increase your income.
You would be wiser to wait until you have either divorced or resolved your differences. I expectyou will also be filing separate tax returns.
 

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