Financing in Franklin>Question Details

John, Home Buyer in Franklin, TN

I'm going through a divorce and will be signing a quit claim deed on the current house leaving her the house and taking cash.

Asked by John, Franklin, TN Tue Oct 16, 2012

My concerns are that my old mortgage will still be on my credit report, the cash from the settlement will provide the downpayment and my available income will include child support I will be recieving from her. My credit score is excellent and I have been employed in the same job for a long time. I have no other outstanding debt except a car payment.

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I understand your situation. First, find another attorney and sue the divorce attorney that let you quit claim without a release of liability, okay, forget that, just one of my pet peeves.

If your income qualifies for both mortgages it isn’t a problem as long as the payments on the old mortgage are paid on time. If she doesn’t make the payments as agreed your credit scores will take a nose dive and that is a big problem.

If you do not qualify for both mortgage payments then you’ll need to prove to the lender on your new mortgage that she is capable of making the payments on the one and is making them on time. Depending on the underwriter and the type of loan you use on the next home that time line could be as short as 6 months, or as long as 12.

Jim Simms
NMLS # 6395
Financing Kentucky One Home at a Time
Web Reference:
0 votes Thank Flag Link Tue Oct 16, 2012
I agree with all the agents below. The old mortgage will be on your credit report and if she doesn't pay it you will be penalized. I have seen it be a severe penalty too. And that mortgage amount will count as debt against you when you go to apply for another loan. That is debt that will behave as if it is yours, even if it isn't. Which legally, it still is if your name is on it, even though she has agreed to pay it.

You need a lawyer and a mortgage lender. She needs a new mortgage to get you off the current one.

Best wishes,
0 votes Thank Flag Link Tue Oct 16, 2012

As Realtors we are taught about quit claim and other types of deeds, but the minutia are best left for real estate or property attorneys. He/she can look at the details of your divorce decree and give you sound advice that will protect your interests and tell you what you need to do to insure that you are in a more solid position when you are ready to purchase your own home. I would also consult with a lender in the process to make sure you are making choices that will not adversely affect your ability to receive lending.

If you need the name/numbers of a couple of good reputable attorneys and lenders that I implicitly trust, please email or call me at contact info below and I will get you connected. Knowledge is power so arm yourself with good solid information and then make the choices that are best for you.

Prayers for your journey,

Leigh Ann Cates, Realtor
Keller Williams Realty
0 votes Thank Flag Link Tue Oct 16, 2012
You will still be responsible for that mortgage unless she refinances it. Even though the divorce decree gives her the house, if she did not pay, the lender could still come after you.

0 votes Thank Flag Link Tue Oct 16, 2012
Hi John,

You should talk to your Attorney and a Real Estate Attorney. I am not an Attorney but believe (confirm with Attorney) that a Quit Claim Deed only removes your name from Title - not the mortgage(s). If this is the case, are you sure you want to be legally liable for a property you have no Title to?

Shanna Rogers
SR Realty
0 votes Thank Flag Link Tue Oct 16, 2012
I am not sure of your exact question. For any legal advice concerning a Quit Claim Deed and its impact on you, you would need to consult with your attorney.
0 votes Thank Flag Link Tue Oct 16, 2012
Hi John,

I went through this a few years back and you'll need to really get together with a trustworthy lender to navigate what is a potential minefield.

I f you don't have one, please let me know and I'll pass some info along.

Good luck!

615 579-7909

Simon Hartland
Certified Short Sale Specialist
Direct: 615 579-7909
Yahoo IM: SimonHartland – Cool Search tools and personal interface.

Realty Trust Residential
1600 Westgate Circle, #100
Brentwood TN 37027
0 votes Thank Flag Link Tue Oct 16, 2012
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