How to remove spouse from mortgage
Quitclaim Deeds and Mortgage Refinancing – Removing Your Spouse’s Name After Divorce in New Jersey
A recurrent situation is where the parties to a divorce decide that one party will remain in the property after the divorce and they have to get the other party’s name off of the deed and/or the note and mortgage.
Here’s How To Remove Your Ex-Spouse From The Deed
To take your spouse’s name off of the deed you have to execute a new deed from you and your spouse (as grantors) to you (as grantee). This keeps the chain of title intact. Once you and your spouse have signed this new deed it has to be recorded with the county clerk in your county. Now the chain of title will show that you and your spouse purchased the property in a certain year and then you and your spouse transferred the property to you on a certain date. The mechanics of the transfer are very straightforward. This deed is called a quitclaim deed. It is often mistakenly referred to as a “quick claim deed”.
Attachments to Deed
There two other attachments that need to be filed along with the deed in New Jersey. The attachments are: (1) The Seller’s Residency Certification/Exemption (GIT/REP-3) ; and (2) The Affidavit of Consideration. If you are also refinancing the property your lender may prepare this paperwork for you. Check if your lender if they will take care of preparing the deed and attachments or whether they want your attorney to handle deed the transfer paperwork. If you are not refinancing the property then you can contact my office at 201-585-7477 to accomplish the deed transfer for you.
Affidavit of Title and Title Search
Your ex-spouse should also sign an affidavit of title regarding the property. The affidavit of title is a standard form affidavit in which your ex-spouse certifies in writing under oath, in front of a notary, that he or she has not done anything to have a lien placed on the property. The affidavit of title protects you so that if, after the title transfer, an issue pops up on title connected to your spouse you have an affidavit from them that you can utilize if you have to go to court to force them to remove the lien.
While an affidavit of title is useful a title search is even more useful. A title search is performed by a title company. The title company will search the court and county land records to see if there are any liens on your title. This is your best way to verify that there are no liens that you did not know about on your property.
Usually, your spouse’s signature on the affidavit of title and the title search are a part of the refinance process. If you are refinancing you should check with your lender to insure that they will take care of these issues. If you are not refinancing you can contact my office to complete this
Realty Transfer Tax Deadline
Every New Jersey real estate transfer is subject to a realty transfer tax, which varies depending on the amount of the transfer. However, there is an exception to the realty transfer tax for divorcing coupes who transfer their property within 90 days from the date of their divorce. As well, there is an exception for transfers between husbands and wives, and for transfers for under $100. To avoid the realty transfer tax your safest bet is to have the new deed signed and recorded within the 90-day post-divorce period. Alternatively, you can transfer the property and have it recorded while you are still legally husband and wife. The realty transfer tax deadline is a hard deadline. If you miss the deadline by even one day, you may be on the hook for thousands of dollars in transfer tax.
Here’s How To Remove Your Ex-Spouse From The Mortgage
In some situations after you’ve removed your ex-spouse off of the deed you also have to remove them from the note/mortgage. This process is more complicated. If your ex-spouse is not on the note/mortgage then there is no issue of removing their names. If however, your spouse’s name is on the note/mortgage, in order to remove their name you have to attempt to refinance the property into your sole name. The refinance process has 5 steps:
Step 1. You will choose a bank to work with who will appraise the property to assess its value and see if there is sufficient equity to accomplish a refinance buyout.
Step 2. A credit check will be performed by the bank to see what mortgage rate you can obtain for the new note/mortgage.
Step 3. You will submit your financial information to the bank’s underwriting department, and they will render a decision as to whether your financial profile meets their mortgage lending qualifications.
Step 4. Assuming that you are approved by the underwriting department you will receive a mortgage loan commitment letter stating the terms of the loan (including your costs for the loan, the mortgage rate,
Step 5. The bank will schedule a closing. At the closing the closing attorney will cut a check to your ex-spouse to buyout their interest (if any) in the property. You will receive a new note and mortgage, and your ex-spouse’s name will have been removed from the property.
If you cannot refinance the property during the timeline agreed to by you and your ex-spouse, and your ex-spouse won’t extend the timeline, then the property will be listed for sale, and the sale proceeds will be divided between you and your ex-spouse at closing.
If you have questions about removing your spouse or partner from the deed and/or mortgage don’t hesitate to call me at 201-585-7477. Or e-mail me using the e-mail contact form. I have been representing clients in Bergen, Passaic, Hudson and Essex counties in divorce and separation property transfers for over 20 years. The phone or e-mail consultation is free.Source: www.newjerseydivorcelawyersblog.com