In the olden days, a simple quit claim deed would take care of removing either spouse in a divorce from financial responsibility. Now, it seems that the lender will require that the loan be rewritten at prevailing rates for the spouse that gets the house.
Would appreciate some thoughts on getting around this. The mortgage is fixed at 5.8% and the property is located in Colorado.
I don’t think someone set you quite straight on the old days. Just because you quitclaim one of the owners off of the title doesn’t mean they are released from liability on the loan(s).
You may want to contact the loan servicing department and inquire about the process for releasing one of the parties from liability – provided it can be shown that the remaining party is financially capable of qualifying for the old loan on their own. If they allow it they may only charge you a minimal fee.
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