How to Pay Off an Ex-Spouse When Seeking a Mortgage

How to Pay Off an Ex-Spouse When Seeking a Mortgage

Buying your spouse out of a property can be dicey.

By Scott Sheldon Stuck paying for a house that's no longer yours? Buying your spouse out of a property can be dicey, especially if both parties disagree with one another on the debt and equity objectives. So here are some ways to separate and pay off an ex-spouse when getting a mortgage. Net Yet Divorced or Separated?: First, if you and your ex are still legally married, but are not yet legally separated or officially divorced, this can pose problems related to the scope of the desired split when separating property and liens (loans). If you're buying a home for yourself, your spouse would have to sign a quit claim deed releasing their interest in the property you are buying since you are still legally joined with that person. The key is that the spouse must consent to releasing their interest in the transaction. Divorced & Still Tied to Another Property: Let's say you're trying to purchase a home, you are legally divorced and the previous property has been awarded to your ex-spouse in the divorce decree. However, for whatever reason your ex-spouse is not able to qualify for a new mortgage to refinance you off of it. Your credit report shows a mortgage that your name is tied to on a property you no longer own nor have responsibility for. In the eyes of the mortgage lender, because the liability (loan) is tied to the property and has not been paid off with your name associated with it, the liability is still considered to be joint.

How to Pay Off an Ex-Spouse When Seeking a Mortgage

The problem here is that your credit history and credit score are directly affected by your ex-spouse's sole ability to make timely mortgage payments on the joint credit account. The only way to remove the responsibility from you, beyond the divorce decree, is for the other party to sell the house or refinance the mortgage, and taking your name off the loan, thus omitting the

liability from your debt-to-income ratio on your new purchase. Refinancing to Buy Out the Ex-Spouse: Say both you and your spouse own a home together. Without the divorce degree and without a separation agreement, both parties collectively agree that one spouse will stay in the pro