The Differences Between the Property Title and Mortgage with Your Marital HomeExcept in rare circumstances, only one of you will continue to own your marital home after your divorce. The most contentious issue surrounding your marital home will be who will keep it or whether you should sell it and divide the proceeds. If one of you is keeping your house, it is important to complete the agreement by legally transferring ownership and financial responsibility to one person. As the person keeping the home, you do not want your former spouse to have ownership rights over the property. As the person who is giving up the home, you do not want to be liable for mortgage payments on a house that you no longer own.
The property title for your house is your ownership interest in the house, which can be full or partial. When you co-own a home with your spouse, both of your names are on the title to show that you each have partial ownership of the house. If your spouse agrees to give you full ownership of your marital home, you will assume your spouse’s ownership interest in the title. A deed is a legal document that transfers a property title to a new owner. Quitclaim deeds are the most common deeds used during Illinois divorce because:
- It is a quick and relatively simple process; and
- The recipient knows that the grantor owns the property and has the right to transfer it.
If you complete the deed while you are still married, you should be able to avoid a transfer tax because it is a gift between spouses.
Transferring your portion of the property title to your spouse does not remove you from the mortgage on the house. You could still be liable if your spouse falls behind on mortgage payments, which would hurt your credit. The spouse who keeps the home needs to refinance their mortgage in their name only. Refinancing could be problematic if you have a poor individual credit history or cannot prove that you can afford regular mortgage payments after your divorce. Receiving spousal maintenance could help determine whether you will be able to refinance your mortgage.
Contact a Kane County Divorce Attorney
There are financial consequences to keeping your marital home after a divorce, such as paying your mortgage, property taxes, utility fees, and maintenance. In some situations, it may be better to allow your spouse to keep the home or to sell it. A Batavia, Illinois, divorce lawyer at Van Larson Law, P.C., can help you decide what you should do with your marital home. Call 630-879-9090 to schedule a consultation.