Are you recently divorced and asking this exact question? Anyone that has gone through divorce and decided for one party to keep the house will most likely be dealing with this issue. Before answering this question, let's look at what happens when interest in property is given to the other party. Normally this is accomplished by one buying the other out for their share of assets in the property.

The buyout can be immediate or written in the divorce decree as a payment plan. This can be decided civilly between the lawyer and the two parties or can be decided by the court. Once the decision is made and everything has been stated in the paperwork, the lawyer will have a quit claim deed written up, notarized, and signed by the party giving up interest in the property. This is where it gets interesting.

A quit claim deed is a legal document that shows transfer of interest in property from one party to another. This deed does not remove the other party's name off the loan and it does not relieve them from credit responsibilities if the other party does not pay. When going through divorce proceedings in Atlanta, definitely discuss options with Atlanta divorce attorneys who are familiar with Atlanta family law to see what the best options are for your situation.

What purpose does the quit claim deed serve and why do lawyers recommend it? It's the easiest and fastest way to hand over the property to the other party. This way the house doesn't have to be sold and no one has to deal with the lending company through the proceedings. The bad part is that it can cause the other party to have bad credit and be attached to the loan when they have nothing to do with it. The quit claim deed is proof to the lending company that the other person had given up the property but that is about all. Most lending companies require you to refinance in order to remove your spouses name off the mortgage.

If you cannot qualify for the refinance, then you must sell. Or in many cases nothing is done. This is bad for the other party because they will still be attached and it will show on their credit report preventing them from obtaining another house and possibly other items through finance. In some cases, the lending company may remove the other party's name as an act of kindness, but this is very rare.

It is always best to discuss these topics with a lawyer before the paperwork is finalized to avoid this type of situation. However, if you are asking this question after the divorce has been finalized, talk with your lender and see what your options are. Some loans will let the name be removed simply by showing the lender the quit claim deed. Most first time home buyers loan require a refinance. If you do not qualify for refinancing, ask your lender if there are any other options or ways to take care of the problem.