How to Release an Ex Spouse From Your Mortgage

 In Blog, Housing 101

Breaking up is hard enough without worrying about your mortgage on top of everything else. Unfortunately, when you break up with your spouse, you also might have to release them from your mortgage. No matter how or why you decide to part ways with your ex, you’ll need to make sure you release an ex from your mortgage the right way before you officially go your separate ways.

 

Many ex-partners might decide together that one of them will no longer be responsible for the mortgage, but that doesn’t mean the lender feels the same way. You’ll need to go through a few steps to ensure your separation is officially documented on your mortgage.

 

Remove your ex from your mortgage divorce papers

 

Why Release Your Ex From Your Mortgage?
If both you and your ex come to an agreement, why do you need to release them from the mortgage? It’s nothing more than a formality, right? In reality, there are a lot of legal and financial reasons to go through the process of formally removing your ex-spouse from your mortgage.

 

First, as far as your lender is concerned, both people are jointly liable for the loan. The lender can legally come after both or either parties in the event of mortgage default. Both credit scores will take a hit for late payments, and both can face foreclosure proceedings if the mortgage goes unpaid. No matter your agreement with your ex, you don’t want their finances and credit score tied to yours in this way.

 

 

Different Options to Remove Your Ex From Your Mortgage
There are a few ways to release your ex from your mortgage. They each have different pros and cons, so make sure you discuss these options with your ex or a real estate attorney before you choose the right option for you. Let’s take a closer look at the most common options.

 

1. Refinance Your Home
The first option is one of the most challenging, though it’s also usually the best fit financially. If you have solid credit on your own, you might be able to refinance your home as long as you’re able to prove that you can continue to make payments by yourself. You’ll need to fill out additional applications with your lender, and this can be complicated.

 

You also need to prove your ex-partner is willing to give you the house. If necessary, you might need to “cash out” your ex by giving them 50% of the equity in cash in order for them to be formally taken off the title. This won’t be possible if you don’t have much equity in your home.

 

2. Sell the House
The most well-known solution is to simply sell your home. After you sell, most partners split the proceeds, though this could be complicated depending on your home value, the current market, and the state of your mortgage. In most markets, this option might be in your favor. Before selling, talk to a real estate agent or get your home appraised to know what to expect.

 

3. Get an FHA Streamline Refinance
If you have an FHA-backed mortgage, you might be eligible for a streamline refinance. This allows you to remove your ex from the mortgage while also reducing your monthly payments. However, you’ll need to prove a few things.

 

First, you need to prove that you acquired both the home and the loan over 6 months ago. Next, you’ll need to prove that you’ve made at least 6 payments on the home by yourself. This can be a faster option than traditional refinancing, though it’s only an option for FHA-backed mortgages.

 

4. Apply for a Loan Assumption
Finally, you can inform your lender that you intend to take over the mortgage completely and that you want a loan assumption. Simply put, a loan assumption is when a single borrower takes full responsibility for the loan, removing the ex from the mortgage. Your loan terms will stay the same, and your spouse will no longer need to make payments.

 

While this might seem like a straightforward option, you might need to prove you’re able to afford the payments on your own. Additionally, many lenders won’t even consider a loan assumption.

 

 

Keeping Your Home After Divorce
Facing a divorce can be complicated, but you have options when it comes to your mortgage. While nobody wants to deal with the legal consequences of separating loans and finances, it’s important you follow the steps correctly to protect yourself.

 

Above, you’ll find a few options for removing your ex-spouse from your mortgage. Once you’ve fully claimed your mortgage, you’ll be free to move on with your life with confidence.

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