Should You Quit Claim Your Home During DivorceMonday, November 5th, 2012
Should You Quit Claim Your Home During Divorce
Something that comes up a lot during the divorce process in Santa Clarita is what to do about the home. Many times my clients will decide who is going to keep the home and who is going to move out.
The question then becomes, “how to you get the other spouse off of title?” The answer is not as simple as it may seem.
Yes, it is true that you would use an instrument called a “Quitclaim”. A quitcliam is a legal instrument by which the owner of a piece of real property, called the grantor, transfers his or her ineterest to a recipient, called the grantee. The owner therefore effectivly “quits” his or her right and claim to the property.
One issue that exists is that when you quitclaim your interest in a property, this does nothing in respect to the loan. You are still on the hook for the loan if the spouse you quitclaim to defaults, yet have no interest in the property.
I reached out to my good friend and Santa Clarita Real Estate Expert, Connor MacIvor with the Paris911 Remax Team, and asked him his opinion on the matter.
Connor put together the below video to answer the questions about whether quitclaiming during divorce is the right way to handle it.
So what Connor and I agree on is that you are taking a chance if you quitclaim your home to your spouse and remain on the loan. However, there is little choice in some cases.
Usually, the only way to get the spouse of the loan is to refinance the property. And unless you can qualify on your own and assuming it is not upside down in today’s real estate market, your only other choice is to sell the property.
Despite this, most move forward with the quitclaim so they can get divorced and move on with their lives.