Does Deleting Your Spouse From a Mortgage Contract Affect Ownership?

Removing a Spouse

You may find that you cannot qualify for a jointly held mortgage if your spouse has poor credit or a high debt level. If this situation arises during the mortgage application process, you can resolve the issue by reapplying for the loan by yourself. The same applies to loan modifications since you have to meet the lender's eligibility standards to alter the terms of your loan. Removing a spouse with poor credit may make a modification easier to obtain. If you are in the process of a divorce, the court may allow you to refinance your home as one step in the process of separating the assets that you and your spouse jointly own.

When you buy a home, you must sign the deed and the deed gets recorded at the local county courthouse. If your spouse's name appears on the deed, then you can only remove your spouse from the deed if you and your spouse agree to sign the deed over to you as the sole owner. When you borrow money against your home, anyone listed as an owner on the deed must sign the security instrument part of the mortgage document since the owner's have to sign this form to provide the lender with the consent needed to place a lien on the home. In some states, such as Florida and Vermont, both spouses must sign the deed since married people cannot own primary residence's as separate individuals.

In some states, such as Ohio, both spouses must sign mortgage documents on any loans that are secured by a primary residence. In such states, you cannot remove your spouse's name from the mortgage. In other states, such a Florida, your spouse must sign the mortgage as an owner but does not have to sign the loan as a borrower. When you alone sign as the borrower, you have the responsibility to repay the debt, but you and your spouse both stand to lose the home if you default on the loan.

In some states, you can remove your spouse's name from the mortgage during the application, modification or refinance process, and remove your spouse's name from the deed, courtesy of an interspousal transfer. This document enables one spouse to give up his rights to the family home and the other spouse can, therefore, finance the property and sign as the sole borrower and owner. Interspousal deeds are usually used by couples who are getting divorced so that one spouse can refinance the home prior to the final divorce decree. However, if you remove your spouse's name from the loan but not the deed, then your spouse still owns the home.