Do You Sign a Quit Claim Before You Refinance a House With Someone?

There is a lengthy process to changing ownership of a property and modifying deeds and mortgage loans. By means of a refinance, someone can take his name off a mortgage loan or add his name to a mortgage loan. Being responsible for a mortgage loan doesn't automatically make someone an owner of the property. Acquiring ownership of a home requires completing a whole other document, such as a quit claim deed.

What is Refinancing?

Refinancing a mortgage refers to redoing a home loan. Mortgage lenders do not make changes to original home loans. If a borrower wants to adjust some of the original conditions, such as the interest rate, monthly payment and names on the loan, he would have to apply for an entirely new loan to replace the original. Refinancing is a fairly simple process if borrowers come prepared. This includes having information to show proof of income and maintaining a decent credit score, typically 680 and above.

Quitclaim Deeds

A quitclaim deed is a document often used when refinancing a mortgage to take someone's name off a property or add someone's name to a property. For example, if a divorcing couple has a property in both names, one spouse may opt to keep the home and refinance the mortgage. Refinancing can remove his former spouse's name from the loan, but doesn't actually remove the name from the property. By completing a quitclaim deed, the former spouse signs away her rights to the property.

Signing a Quitclaim Deed

If you're taking your name off a mortgage deed, you can transfer ownership to your former spouse before he refinances the loan. A title company or lawyer can supply a quitclaim form and handle the transfer of property for you. Once you've deeded the property to the other party, he is free to refinance and take your name off the mortgage. With a refinance, your former spouse can also add someone's name to the new mortgage, such as a new spouse or partner.

Considerations

Signing a quitclaim to relinquish ownership of a property and have your name removed from a mortgage doesn't guarantee results. The mortgage refinancing can only happen if your former spouse qualifies for the loan on his own. If he decides to add a new partner to the mortgage, the lender will need both income and credit information. A lender can reject the refinance if your spouse doesn't qualify for financing, which will leave your name on the mortgage loan making you remain liable for the debt.

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