For family law professionals

Can your client qualify?

How a name comes off a mortgage after a divorce, what the decree does not do, and what Alex needs in order to answer the question in writing within 24 hours.

There are three ways out, and only three

Refinance into one name.: The person keeping the house takes a new loan in their name alone, which pays off the old one. The usual route, and the only one of the three that also moves the money for a buyout.
Assumption, where the loan allows one.: Some loans can be formally assumed by one borrower with the lender’s written approval, which releases the other. That depends on the loan, not on the divorce, so the first question is which loan they have.
Sell it, or pay it off.: The loan ends and both names end with it. Worth raising early: some clients choose it once the other two are priced.

What the decree does not do

It does not remove either of them from the loan. The lender was not a party to the divorce and keeps both promises to repay until one of the three things above happens. The decree decides what they owe each other; the note decides what they owe the lender.

What Alex needs to answer the question

The address, and roughly what the house is worth.
The loan balance, and any second loan or line of credit behind it.
Which of them is keeping it, and whether both have been on title a year or more.
That person’s income, support paid or received, and the monthly debts that survive the decree.
Where the decree is: not filed, filed, or signed.

Estimates are fine. A rough answer on rough figures, said plainly to be rough, is more use than a precise one three weeks later.

Four things worth telling a client early

A quitclaim deed moves the title and does nothing to the loan. Signing one without a plan for the mortgage leaves your client liable on a house they no longer own.
A decree ordering one of them to refinance is not a lender’s approval to do it. Check it can be done before the order says it must be.
A missed payment on the joint loan marks both credit reports, whoever was meant to pay it.
None of this needs a credit pull. Ask the question first.

Asking the question

Email the file question to alex@offtheloan.com or call (442) 222-1751. If your client would rather ask themselves, send them your share link from the partners pageofftheloan.com/partners/. No referral fee is paid or accepted in either direction.

This guide prints to a single page. Use your browser's print command and choose Save as PDF if you want to attach it to an email.