Divorce Agreements: What You Need to Know About Changing the Title to Your
Home Without Paying off The Mortgage
Divorce agreements often allow one spouse to purchase the other’s interest in their
former marital home. This concept is called a "buy out" and
usually involves one party buying the other person's interest for
one-half of whatever the equity in the former marital home is determined
to be. During the buy-out, the purchasing spouse takes out a mortgage
for the sum that is due to the spouse selling the property. However, a
buy-out can also be executed through an exchange, or waiver, of assets
that are due to the selling party by the purchasing party.
Divorced parties will often agree to deed the home over to the purchasing
spouse before the purchasing spouse has paid off the mortgage for the
former marital home. This decision can become dangerous when the spouse
who is being bought out remains on the mortgage associated with the former
For example, let’s say your spouse purchases your interest in the
home and makes good on that deal but then doesn't, or is unable to,
pay the mortgage. To make matters worse, you’ve already “quitclaimed”
your share of the former marital home. In this case you might be able
to have your “buy out” money or assets that were used to reach
your agreement. However, you will still be at the mercy of your spouse
when it comes to your credit standing.
When your name is not removed from the mortgage of your former marital
home, the bank still has you listed as a person who is liable for the
payment of that obligation. This means it is possible for your former
marital home to be foreclosed upon if your spouse doesn’t pay the
mortgage. You will also be subjected to the foreclosure proceedings as well.
In order to save yourself from this fate, it is important for you to make
sure that the mortgage associated with your home is either paid off or
refinanced into your former spouse's name, before you transfer over
the property to them. Doing this will protect your credit from being damaged
if your ex-spouse's fails to pay the mortgage. It can also save you
the burden of having to go through a foreclosure proceeding.
At The Law Offices of A. Sheralynn Dow, we are committed to helping families
resolve their disputes and move on with their lives. We offer professional
and efficient legal services to all of our clients and take pride in the
results our firm produces. Let us put our skills and resources to work
for you today.
Contact our Staten Island divorce attorney
to set up your case review.