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RECWMN · Joined: 16 Jul 2008 Posts: 1 1.38 Dollars($)

Me and my girlfriend own a home together we are both on the mortgage. We are breaking up and I am buying a new house. With the market being the way it is she isn't able to refinance because the house isn't worth what we paid for it. My lender wants me to quit claim the house over to her so I can qualify for the new home loan but I'm a little hesitant to do that because I will now be responsible for two loans but only have ownership in one house is that correct? What advise do you have.

laphillips · Posted: Wed Jul 16, 2008 4:57 pm Post subject: Quit Claiming

Hello RECWMN,

Definitely sounds like a dilemma. Has your new lender intimated to you that a change of title on the home you & your girlfriend own together could trigger the due and payable clause? Check with the current lender before you go ahead.

Many homeowners are finding themselves in upside-down-loans. It may be time to also negotiate a short sale with that same lender so that neither of you are financially liable for the home loan. Just something else to consider.

And, yes, it's correct that if you were to quit claim the home to qualify for the new loan you would no longer have any ownership rights in the previous home but you won't be changing the names that are liable for the payments...see the first paragraph.

A quit claim only changes title. It does not affect the loan liability.

Jeanette · Posted: Thu Jul 17, 2008 4:39 am Post subject:

If your exgirlfriend can make mortgage payment on her own until she is able to refianance that would be an alternative. Right! quit claiming does not stop your mortgage responsibility. Also, if you want another house you will need to get prequalify as your DTI (debt to income ratio) might be too high for you to own two homes. Lynette is right on point.

Here are some considerations:

Your ex girl friend cannot refinance and put the loan in her name only so she will make mortgage payment while the note is in your name.

You want to get another house in your name only which can be done if your DTI is low enough.

If you have a significant other with decent credit and good income then the probablity of you getting prequalified for another home loan is high.

Your ex will pay the mortgage on the first home because she lives in it although the mortgage is your responsibilty.

It is really a tricky situation to be in and thats why it will take some thought and consideration.

All the best

Jeanette Smith
Mortgage Planner
Union Mortgage Group

evolovik26 · Posted: Thu Jul 17, 2008 6:28 am Post subject:

Why is your lender asking you to quitclaim the house you currently got?
Are you buying a smaller home and the lender will have to consider it non owner occupied unless you no longer own it?
You are completely right in your assessment of the situation. If you do this you will have 2 mortgage responsibilities legally and one ownership interest. I suppose if you trust your soon to be ex to pay mortgage on time you don't have alot to worry about cause there is no equity but if that mortgage goes past due then its your credit it will affect as well as hers.
And at that point you cannot have any say in what you can do.
Also you might not even be able to quitclaim off that property with mortgage still in your name.
Try finding a lender that will look at the situation and allow you to buy a property with a second house still on your name.

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