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Can you sign your home over to your ex in a divorce?

You and your spouse got married five years after college, and you immediately bought a home together. You lived there for another eight years before a trial separation. You moved out and into an apartment in the city, while your spouse stayed in the house.

Eventually, the trial separation turned into a full divorce. Your spouse -- soon to be your ex -- wanted to keep the home. You had already left, so you felt fine about that. In the divorce decree, your ex agreed to pay the remainder of the mortgage and you agreed to let him or her own the house completely in exchange for other assets. You even took your name off of the property title.

Is that all you need to do? Is the property really out of your hands?

It may not be as clear-cut as you assumed.

Mortgage lenders

If you and your ex owned the home outright, this would all be over. If you were still making mortgage payments, though, it may not. Remember, the lender is not legally obligated to take you off of the mortgage just because your ex now owns the house. Lenders do not care about divorce settlements and decrees. They simply care about getting paid.

You took that mortgage out together. Your name is still on it. You have a legal responsibility to pay.

Your responsibility

For instance, imagine that your ex loses his or her job. Those mortgage payments stop. Your ex starts looking for a new job, but he or she has nothing saved up for the search.

Your mortgage lender may well call you and ask for payment. It doesn't matter if it has been five years since your divorce. You can tell them that the two of you split up and your ex said he or she would pay, but the lender only knows one thing: Your name is on the loan and no one has been paying the loan.

Suddenly, your ex's job crisis is very much your crisis, too.

Removing your name

You can remove your name from the loan. The easiest way to do this is for you and your spouse to sell the house. The third party then buys out your loan. If you made money, you split the proceeds. It's all over.

Another option is to have your ex refinance the house. This can be hard if one person cannot qualify for a mortgage that was originally given to two people. If your ex can, though, he or she can buy the home individually and your name does not go on that new mortgage.

Understanding your obligations

As you can see, it is very important to understand all of your obligations after divorce. Never take anything for granted or make assumptions that lead to trouble in the future.

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