Can I Sign Over My Half of the Mortgage?

You may purchase a home with virtually anyone else you want to. For obvious reasons, many married couples purchase homes together, but people also purchase homes with people they are not married to as well. Sometimes, these people are in long-term relationships or are related by birth. Sometimes it's a business partnership that goes sour. Regardless of the relationship type and why it is no longer intact, anyone who signed the mortgage note is still liable for the payments. You cannot sign over your half of the mortgage, only your half of the ownership of the home.

Ownership vs. Liability

You can own a home and not be responsible for the mortgage. You can also be responsible for the mortgage and not have any ownership rights to the home. Neither of these scenarios is ideal when problems arise. If a partner who you own the house with obtains a mortgage without your name on it, then the partner is responsible for the debt, but you still own your share of the home. If your name is on the mortgage and you transfer your ownership of the home, you are still responsible for the mortgage even though you do not own the home any longer.

Divorce Decree

Who gets the home is often a major question in divorce cases. Usually, whoever retains the home must also keep the mortgage debt. This does not change any of the mortgage lender's rights. Just because the judge says one person keeps the home and must pay the mortgage doesn't prevent the mortgage lender from going after the other partner when payments are missed. If the home forecloses, it will show up as a foreclosure on everyone's credit record, not just the credit record of the person named responsible in the divorce decree. Ask the judge to order the home's mortgage be refinanced out of your name by a certain date to protect yourself from future credit issues.

Business Dissolution

In many ways, this is very similar to a divorce. Hopefully, an exit plan was created when the business plan was developed. If one party wants to keep the home, then it's wise to require that party to refinance the mortgage into his own name and extract your share of the equity within a certain number of days, or require that the home to be sold. Either way, you obtain your share of the equity and no longer have any obligation on the mortgage or any ownership of the home.

Quitclaim Deed

The Quitclaim deed is the legal instrument used to add or remove people and companies from real estate. Since this document transfers legal ownership, it must be filed in the county the home is located in. If you complete a quitclaim deed and do not refinance the mortgage, it could trigger the "Due on Sale" clause of the mortgage, and the lender may foreclose on the home, affecting the credit of everyone who is obligated on the mortgage, not just who is on the title.

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About the Author

David Rouse, currently residing in Raleigh, N.C., has been writing and teaching home owners about the mortgage industry since 1997. Rouse has written training manuals for mortgage professionals and conducted informational first-time home-buyer seminars, providing make-sense answers for a long and confusing process. He studied at Western Kentucky University.

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