Does a Quitclaim Deed Relieve Me of Paying My Home Loan?

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“I am a joint tenant with my boyfriend on a home. We are both listed on the first and second loans. If I quick claim the deed to him, does this relieve me of my responsibility for payment on the loan? Will a quickclaim scenario involve a new loan for him?”

[NOTE: Articles and answers on DearEsq., while written and published by lawyers, do not constitute legal advice, and no attorney-client relationship is formed by your reading of this information. You should always consult with an attorney for any legal situations.]

The short answer is no, you can’t get out from a mortgage that easily.

A quitclaim deed (so-called because you are “quitting”–that is, giving up–any claim you may have in the land) would be effective to transfer your ownership to him. However, real estate loans come in two parts: a promissory note and a security interest (in most states, a “mortgage” or a “deed of trust”).

The promissory note is your personal promise to repay the loan. That goes with you, whether you own the property or not. The security interest gives the lender the right to foreclose on the property in the event you fail to repay the loan as promised.

To complicate matters, though, most home loans have a clause that affects the loan on a change of ownership. The exact terms will vary depending on the lender and the loan program, but before you sign any deeds, you should check with your lenders to make sure that this won’t trigger some potentially serious financial consequences.

If you want to get out of your responsibility for these loans, you’ve got a couple of options. The lenders might be willing to relieve you of your responsibility voluntarily, usually at a price. Or, your boyfriend could refinance.

You should also check with your tax advisor before taking any steps of this nature. Depending on the specifics of your situation, there could be an income and/or gift tax consequences, amongst others.

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Author: House Attorney

A house attorney has answered this question.

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