Three Options for the Marital Mortgage
Option 1: Sell the house. Simplest solution. Proceeds pay off the mortgage and any remaining equity is split per the decree. Both names come off the loan. Clean break. Option 2: Refinance into one name. The spouse keeping the house refinances the mortgage in their name only. The other spouse is removed from both the deed and the mortgage. Option 3: Keep the joint mortgage. One spouse keeps the house and makes payments, but both names remain on the mortgage. This is the riskiest option.
Option 3 is common but dangerous. If the spouse in the house stops paying, the mortgage company comes after both parties. This is the same joint liability problem that affects all post-divorce joint debts.
Refinancing Requirements
To refinance into one name, the keeping spouse must qualify independently: sufficient income (debt-to-income ratio typically under 43%), adequate credit score (620+ for FHA, 680+ for conventional), and enough equity or savings for closing costs. If they can't qualify alone, refinancing isn't possible.
If refinancing isn't possible immediately, the divorce decree should include a deadline for refinancing (e.g., "Wife shall refinance within 12 months") and a consequence for failure (e.g., the house must be sold). Without a deadline, the other spouse may be stuck on a joint mortgage indefinitely.
Protecting Your Credit on a Joint Mortgage
If your name is still on the mortgage after divorce: monitor the loan payments (set up online access or payment alerts), be prepared to make payments yourself if your ex falls behind (to protect your credit), and keep records of any payments you make for reimbursement. Your credit score doesn't care about divorce decrees -- a late payment on a joint mortgage damages both parties' credit equally.
If your ex stops paying and you can't afford the payments, your options are: negotiate with the lender for a modification, pursue a short sale, file bankruptcy (Chapter 13 can help save the house, Chapter 7 can eliminate the deficiency), or as a last resort, allow foreclosure and deal with any tax consequences of cancelled debt.
Frequently Asked Questions
Can I force my ex to refinance the mortgage?
If the divorce decree requires them to refinance by a deadline, you can enforce that through a contempt motion in family court. If they can't qualify for refinancing, the court may order the house sold. If there's no refinancing deadline in the decree, you may need to go back to court to request one.
Will a quitclaim deed remove me from the mortgage?
No. A quitclaim deed removes you from the title (ownership) but NOT from the mortgage. These are separate things. If you sign a quitclaim deed without being removed from the mortgage, you've given up your ownership interest but retained full liability for the loan. Never sign a quitclaim deed until the mortgage is refinanced or paid off.
What if the house is underwater (owed more than it's worth)?
Underwater properties complicate divorce. Neither spouse wants to take a loss. Options: both continue paying until equity returns, negotiate a short sale with the lender, file bankruptcy to discharge the deficiency, or one spouse keeps the house hoping for appreciation.
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