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Before divorce is final - how to buy a house of my own?

I live in California, a community property state, and own a house with my soon-to-be ex-husband. The divorce is taking much longer than expected and I'd like to buy a house of my own before the divorce is final.

I'm approved for financing on my own and would like to be the sole person on this future title and mortgage. I've read that an Interspousal Transfer Grant Deed would make the property solely mine and that my still-husband would have no claim to it, but before he signs, he needs to be assured that there are no liabilities for him. I'd like to know how this future property (with Interspousal Transfer Grant Deed done) would/could affect him:

If I should fail to make payments (since we're still legally married) could it possible affect him?

Also, can my owning property (with an ITGD) affect his credit? (He'll be applying for a loan on his own as he'll be buying me out of our current house.)

Tax implications?

Any advice you have would be helpful.

Thanks in advance!

sara's picture
sara | Joined: July 5, 2006 03:16 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Pam,

Welcome to the forums.

If the mortgage in the new house is in your name, and somehow you cannot pay, then your soon to be ex won't be responsible. This is also because the property will also not have the ex's name.

Your owning property with an Interspousal transfer grant deed will not affect your ex's credit.

Since you ar staying in a community property state, therefore, whatever interest you receive from a house bought after marriage becomes partly your husband's property. So, it's ok if you ask him to sign on an ITGD and transfer whatever interest he gets. However, if the divorce is over by the time you buy, then there's no need to use an ITGD.

Take Care

Like | Dislike | Share | Posted: Tue, 02/12/2008 - 20:23 | Post subject:

larry2's picture
larry2 | Joined: June 27, 2007 02:50 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Pam,

Sara has given you sound info and I agree with her that if you take the mortgage, then he will have no liability for that and you can use "an Interspousal Transfer Grant Deed" to take him out of the deed. The only thing that I would like to add is that he may have to pay gift tax as this property transfer to you will be considered as a gift.

Annual gift tax exemption for a person is $12000.

Feel free to ask if you have any further questions.

Best of luck,

Like | Dislike | Share | Posted: Wed, 02/13/2008 - 12:07 | Post subject:

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