What happens to the house in a divorce case? Who gets it? This is a question that often arises when a couple is splitting up. To find the answer to this question for your individual situation, it’s important to know some specific details.
When you purchase a house, usually two legal documents are signed. The first one is a “Deed”. This is basically a title to your house. The second document is a “Mortgage”, this is the document that lays out the terms of the loan you use to purchase the house. These can be in one spouse’s name or both spouses’ names (joint), it’s important to know how these are titled to determine your options. Let’s look at these documents and the options associated with them:
Deed – If both parties are listed on the deed (joint), it is simple to remove one spouse’s name from a deed with a Quit Claim Deed drafted by your attorney and filed with the Register of Deeds in your County.
Mortgage – Unlike a deed, it can be very difficult to get your name off of a mortgage. A mortgage means that the people that have signed it have pledged to pay the amount owed. The mortgage was granted to the parties with the assumption that both people would be responsible to pay it back to the bank based on both of their incomes. So how do we get a name off of a mortgage? There are three main options:
1) Refinance the mortgage into just one person’s name. This means that the person that wants to keep the house would need to take out a new loan in just their name to pay off the old loan. This may not be possible if the house’s value is too low or if the person trying to refinance does not earn enough to qualify for the new mortgage loan.
2) Assume the mortgage. In rare instances, a bank may be willing to allow one person to “assume” the loan and remove the other person’s name from the loan. This is similar to a refinancing. I have only see this happen very rarely and your lender may not offer this option.
3) Sell the house. In some situations, neither party may be able to get a new loan in their name and selling the house may be necessary to clear the mortgage, assuming the house is worth more than is owed on the mortgage.
As always, if you are considering divorce and have questions about your house, discuss your individual situation with an attorney today. Attorney Allison Greenlee Korr handles cases in Kalamazoo, Battle Creek and all surrounding counties, call today for a consultation. 269-381-4471