Frequently Asked Questions
“What is a Quit Claim Deed?”
A Quit Claim Deed is a form that allows a homeowner to remove or add an individual to the deed of a property. This is a simple form that needs notarized and recorded with the county the home resides in. This can be done with a local Title Company or by an Attorney. Filing a Quit Claim Deed form DOES NOT remove an individual from a mortgage. Typically, a refinance is necessary to accomplish this. It’s possible to be removed from the Deed but still be obligated to pay the mortgage.
“How do I get my name off the mortgage?”
When both spouses have their name on the mortgage there are two options:
- You can sell the house and pay off and close the mortgage.
- You or your spouse can refinance the house and get the new mortgage as an individual only.
Filing a Quit Claim Deed will only remove you from the Deed (Basically removing your rights to the home), it does not release you from the mortgage. Most mortgage companies will not make changes (removing a borrower) after the mortgage has been funded and recorded. Typically, a refinance is necessary to accomplish this.
“Can I have two mortgages at once?”
It is completely possible to have multiple mortgages on different properties. You can even have multiple mortgages on the same property is there is enough equity to support the loan size. Most mortgage programs have income qualifications and debt limits that determine the maximum amount you can borrow. Depending on your income vs. debt, you may be able to qualify for a new mortgage in addition to your current mortgage.
Some loan types only are only allowed to be used one at a time so be sure to consult with your Mortgage Advisor about your situation.
“Who is responsible for the house payments once the divorce is finalized?”
- Typically, you remain liable for the mortgage unless you sell the house or refinance the mortgage.
- In the event of a divorce, if one spouse is keeping the residence, unless a full refinance takes place, the other spouse is still liable for the debt. This can cause financial hardship or negatively affect the credit report for the non-occupant spouse if the other does not pay the mortgage debt on time.
- Until the refinance is final and the deed on the home has legally been changed, the non-occupant spouse is still liable for the mortgage, regardless of which spouse pays the monthly bill.
“Can I refinance my mortgage before my divorce is final?”
It is certainly possible to refinance your current mortgage before your divorce is final. You should definitely communicate with you Attorney to make sure it’s advisable to do so. In the middle of a Property Settlement Agreement negotiation it’s typically not advisable to make any changes. You should also be sure to let your Mortgage Advisor know you are in the process of a Divorce as there’s sure to be additional documentation that will be needed for loan approval.
“Will my divorce affect my credit scores?”
The legal act of a divorce will not impact your credit scores. The events that happen before, during and after a divorce are often the culprit in harming an individuals credit scores. Mis-communication between two separating spouses can often lead to late or skipped payments. Additional debts as a result of separation can also affect one’s ability to make their payments on time.
You can check your credit report for FREE once a year at http://AnnualCreditReport.com. If you want to see what your credit scores are you will have to pay a minimal fee.
“Can I use my new Child Support as qualifying income for a mortgage?”
Different mortgage loan programs have different guidelines regarding the use of newly acquired child support. Be sure to tell you Mortgage Advisor how much you receive per month, how long you’ve received it, how you get paid and how long it will continue. You will also need to provide documentation from your final divorce paperwork to document this income. In addition, you may be asked to provide bank statements to show a history of receiving child support.
“I just started paying child support. Will this count against me with a new mortgage?”
Typically child support obligations will be treated the same as other recurring monthly debts. Your Mortgage Advisor will probably ask your for documentation that shows how long you’ve paid child support, how long it will continue and what the monthly obligation totals. If it is not scheduled to continue beyond twelve months it might not be included in your monthly obligations.
Be sure to tell your Mortgage Advisor that you are paying Child Support.