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How to Transfer the Marital Residence

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dlundy

Junior Member
What is the name of your state? Ohio

We have no equity in our house, moved in last year then my wife decided to end the marriage. I would like to keep the house so our son has a stable home for his last three years of school. I can afford the current house payment since we did an interest only loan, my wife cannot. I am being told that if I want to keep the house I will need to refinance to get my wife off the note. Is there any other way that this can be done without refinancing?

Any advice would be appreciated :)
 


JETX

Senior Member
dlundy said:
I am being told that if I want to keep the house I will need to refinance to get my wife off the note. Is there any other way that this can be done without refinancing?
Who is telling you this?? You were either told wrong or misunderstood. The mortgage has NOTHING to do with ownership.... nor is there a statutory obligation that she be removed.
Though it is PREFERABLE that the 'leaving spouse' wants to be removed from the mortgage obligation, it is NOT required by any law.
If you want to remove her (or she wants to be removed) from the mortgage, the only ways to do that are:
1) To refinance without her on the application, or
2) Sell the property (and pay off the indebtedness), or
3) Get the permission of ALL parties to the mortgage removing her from the obligation (unlikely).
 

LdiJ

Senior Member
While I agree with the other poster that its unlikely that the law in Ohio actually states that a spouse must be removed from the mortgage in a scenario like this, I think the odds of getting a judge to order that a spouse quit claim ownership yet remain on the mortgage is fairly slim. A judge is far more likely to order the house to be sold.

In addition, while its possible that you may end up with a loss upon selling the home, the "interest only" nature of the loan makes now potentially a better time to sell the home than 3 years from now. The market is still "up" now, and there is every indication that may not be the case in three more years.

Your argument would also require you to be the one to recieve primary custody of your child. Unless your wife has agreed to that, that outcome is also unclear at this stage.

My honest recommendation would be to either attempt to qualify for a regular mortgage and refinance the home....or sell the home.
 

JETX

Senior Member
LdiJ said:
While I agree with the other poster that its unlikely that the law in Ohio actually states that a spouse must be removed from the mortgage in a scenario like this, I think the odds of getting a judge to order that a spouse quit claim ownership yet remain on the mortgage is fairly slim. A judge is far more likely to order the house to be sold.
And of course, that is NOT necessarily true.
Who said anything about a court ordered quit claim?? That issue is normally resolved as part of the pre-hearing issues and agreed to. If not agreed in principal, either party MAY ask the court to rule on the issue. Personally, I think that this is just a 'wish list item' as presented by the other spouse or her counsel.
 

LdiJ

Senior Member
JETX said:
And of course, that is NOT necessarily true.
Who said anything about a court ordered quit claim?? That issue is normally resolved as part of the pre-hearing issues and agreed to. If not agreed in principal, either party MAY ask the court to rule on the issue. Personally, I think that this is just a 'wish list item' as presented by the other spouse or her counsel.
I am basing my recommendations on the fact that the OP clearly wants to keep the house without refinancing to remove her from the mortgage. The odds of his wife agreeing to that aren't very strong. Most legal or financial advisors would likely advise against that. As a financial advisor I certainly would advise against it 1) Due to the "interest only" nature of the loan, and 2) Due to the current market conditions.

If she won't agree, then his only option would be to take it in front of the judge....and I don't think its very likely that a judge would make that kind of an order. Possible?, of course. Likely?, no.

In fact, I think it would be in both of their interest's to get out from under that "interest only" loan. There is a balloon payment that is going to be coming due at some point in the relatively near future, and if the market does what the experts are predicting, finding a way to either sell or refinance to cover that balloon, could be problematic a few years down the road.
 

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