Till Death Do Us Part… Divorce & MortgagesDecember 3, 2007
One of the newest changes to the fluctuating mortgage market that may trip up unwary homebuyers is the difficulty in removing a divorced partner from a mortgage loan. In times past, if one spouse chose to remain in the home and assume the mortgage payments, their partner would refinance their debt, effectively placing the mortgage solely in the hands of the resident spouse. But since it is more difficult for people to obtain loans under today’s guidelines, and homes may not appraise at former high values, divorced parties may have to think this option through. Accordingly, debtors beware…a Quit Claim Deed will not release you from the obligation to repay your mortgage loan and the debt remains a part of your credit record. Getting a new loan will be problematic. With today’s current loan and market conditions…it may be “till death do you part” when it comes time to mortgage debt.