After a break-up or divorce, the only way you can remove a name from a mortgage is by selling the home or refinancing. If you want to keep the home, you'll need to refinance the loan solely in your name. Even with a divorce decree stating you get the home, you'll still need to go through the refinance process -- and divorcing a mortgage isn't always easy, since the bank isn't required to approve your application. The lender's decision is based on only your credit and finances, so your ex won't need to complete any paperwork. However, you will need his cooperation and consent to remove him from the deed.
Check your credit report. The interest rate you receive is based on your credit score. If you have poor credit, refinancing may not be an option. Also consider your debt-to-income ratio. Since you're removing your ex-spouse, you'll need to prove your income is sufficient enough to pay the mortgage and your other debts. Finally, compare the value of your home to the remaining loan balance to determine your equity. You'll generally need at least 20 percent equity in the home to refinance.
Dispute any errors or discrepancies with each credit bureau. If the information that appears on your report can't be verified by the creditor or collection agency, it must be deleted.
Contact your lender to discuss your options. Let your lender know you want to refinance the loan to remove your ex-spouse. Although you don't have to refinance with your current lender, it's a good starting point since it already has your personal information and loan details.
Shop other lenders. Compare interest rates and closing costs to help determine which lender to choose. Don't worry about the multiple credit inquiries impacting your score. As long as you keep the rate shopping to a 30-day window, credit scoring models typically lump them together as one hard inquiry.
Complete the application in your name only. You'll need to submit certain documents, including pay stubs, W-2 forms, bank statements and proof of homeowners insurance. If you're divorced or legally separated, provide a copy of the divorce decree or separation documents showing court-ordered spousal support or child support.
If your credit and finances aren't strong enough to qualify without your ex, you may have to put more money down or ask someone else to co-sign.
Have your ex sign a quitclaim deed once your refinance application is approved. The quitclaim deed relinquishes his ownership in the home. An interspousal transfer deed also allows one spouse to transfer interest to the other, either during the marriage or after a divorce. Unlike a quitclaim deed, the interspousal deed helps avoid county transfer taxes that may be assessed. Have your former spouse come to the lender's office and sign the deed in the presence of a loan officer.
Attend the closing. Your former spouse doesn't need to appear at the closing, since he won't be signing any documents. Read over all the loan documents and sign to finalize the deal. The escrow agent will handle wiring the funds from the new lender to the current lender to pay off the loan.