It’s called Release of Liability, where the former spouse signs a quit-claim deed that gives up his or her claim to the home. So whether you’re in Rosemary Hills or any other neighborhood, read on for more information.
And although signing the quit-claim deed takes the former spouse’s name off the title, it doesn’t remove it from the mortgage. To execute an actual Release of Liability, lenders will charge from $300 to $1,000 and may impose an additional nonrefundable application fee of $250 to $500--substantial amounts, but still less than the costs involved in a complete refinancing.
Having a name removed from the mortgage can benefit both parties in the divorce. If your former spouse was behind on debts, a lien might be placed on the home. Likewise, if you were behind on the mortgage, it could hurt your ex-spouse’s credit.
Be aware that not all lenders offer this option and those that do will check your credit to ensure that you meet minimum credit scores and that you are current on the monthly mortgage payments. They may also require that other investors agree to this deal. If you can prove you can handle the monthly payments on your own, the lender may be agreeable. However, if you currently owe more on the home than it’s worth, this is not an alternative for you.
If you’re a qualified borrower and your current lender won’t perform the Release of Liability, you might change their mind by stating that you’ll just work through another lender. It may take several inquiries, but chances are you’ll find someone who will execute this for you. Divorce is hard enough, so it’s worth knowing all the options to help make some transitions as easy as possible.
Contact me, Mynor Herrera, today for expert help buying or selling in the DC, MD, & VA areas! I also specialize in Bethesda and Chevy Chase, as well as the sub-divisions of Rosemary Hills, Rock Creek Forest, East Bethesda & Whitehall Condominium.
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