Get Out of Debt Guy

I Want to Buy a House But Still On Old Mortgage With Ex-Husband. - Denice

Posted April 29, 2013

WRAL Reader Question

Divorce papers signed in October. My husband was always the breadwinner and I a stay-at-home mom of our three girls. Two years before the divorce he got injured and was out of work and on disability. I went to work outside of the home, making 30K/yr.

He cashed in all of our retirements. Flash forward to now.

The mortgage company will not let him refinance because he wont qualify without my name on the loan. I am still attached to the loan even tho I had to sign over the deed to him.

I would really like to buy myself a small home (mainly due to the tax benefits) but would never be able to qualify with my name still on that mortgage. Can I get my credit seperated from him in any way?

Can I get my credit separated from my X husband's? Can I qualify for a loan even tho my name is attached to a mortgage (that I am not on the deed for)? I want to purchase a home for myself.

Denice

Answer

Dear Denice,

Unfortunately this is a common problem when people get divorced. When you dissolve the mariage you break the bonds of the marriage but not the bonds with the creditors. The divorce agreement is an understanding between you and your ex-husband but any joint debt you had during the marriage is still joint debt.

Unfortunately it sounds like the deed was signed over to him but you are still on the mortgage and it is probably a joint loan. As long as that loan is outstanding you will be responsible for that debt and if he does not pay the mortgage company is going to come after you for payment. Essentially what has happened is the asset, the house, was signed away, but not the debt.

In reality the only way to get yourself off the loan is for him to refinance the property or for you to file bankruptcy and legally extinguish your obligation for the mortgage. Another alternative is that your ex-husband sells the house and that pays off the old mortgage. But from what you shared it did not sound like that was even in the works.

As long as you are jointly obligated on that old mortgage it will reduce the amount you can borrow for any future home. 

Steve Rhode
WRAL Get Out of Debt Guy

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About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.