It’s not easy to change a mortgage after a divorce

When it comes to property division, the marital home is usually the most valuable asset that divorcing spouses living in California have to deal with. Deciding which party gets to stay in the home is just the first challenge. After that, they must work out an agreement about the mortgage or negotiate some type of buy-out.

If they are still making payments on their mortgage, truly separating finances after a divorce can be very difficult. That’s because mortgage lenders do not care if the two names on a mortgage are a married couple or a divorced couple. A mortgage lender simply sees two people that both share a financial responsibility to keep making home payments. A divorced homeowner who wants the ex-spouse’s name off of the mortgage will have to apply for refinancing.

Refinancing after a divorce can be difficult, and sometimes impossible, for newly single homeowners, as they will only have one income rather than two when they were married and their spouses were also working. A mortgage lender may not approve a divorced person’s application for refinancing, or the lender may ask for a cosigner and a large down payment.

Even if they cannot refinance their mortgage, they can transfer ownership of the marital home through a quitclaim deed after the divorce. A quitclaim deed is a legal document that allows one person to surrender property rights to another person without any exchange of money. An attorney can often be of assistance in negotiating this aspect as part of an overall property settlement agreement.