07 Jun In a divorce, how can you take over a mortgage and change a deed?

Q. My boyfriend is working on a mortgage assumption to take his ex wife’s name off his home, so it would be in his name only. I’ve been reading that the deed should also be solely in his name. How can he go about that? Can the mortgage company put that into place for him? A refinance and an assumption are different so I am not sure what steps should be taken with the deed. The mortgage company wants the deed and the divorce decree as documentation to change names and such but the deed currently has both their names still on it.
— Girlfriend

A. Your boyfriend’s divorce agreement should spell out in clear, unambiguous language what he’s expected to do.

The specifics matter.

Generally, if a couple jointly owns a piece of real property during their marriage, and if as part of the divorce one spouse is going to retain 100% of that residence, the terms of the divorce will require the person keeping the residence to be solely responsible for any and all liens or encumbrances existing against the residence, such as mortgages and home equity lines of credit, said Kenneth White, a certified matrimonial attorney with Shane and White in Edison.

He said the person who is keeping the residence will be required to remove their ex-spouse’s name from any and all liens or encumbrances associated with the residence, including all mortgages or home equity lines of credit.

“An ex-spouses name is typically removed from all existing mortgages or home equity lines of credit by the party retaining the residence refinancing the debt into his/her sole name or by requesting that the lien holder allow him/her to assume the mortgage or home equity line of credit into his/her sole name,” he said.

The terms of the divorce will also dictate that they execute a deed, transferring title to the property from the parties’ jointly into the sole name of the party retaining the residence, he said.

Similarly, the document setting forth the terms of the divorce will most likely specifically indicate who is to prepare the deed, White said. Most often it’s the attorney for the person who will be keeping the property, he said.

“It would not be unusual for the terms of the divorce to dictate that the deed must be held in escrow pending the refinance or assumption of the original mortgage and/or home equity lines of credit as the ex-spouse might be concerned that he/she was signing away his/her interest in the real property without any guarantee that he/she would be absolved of any responsibility for the original mortgage or home equity lines of credit,” he said.

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This story was originally published on June 7, 2022.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.