Posted on: 14th Jun, 2011 11:49 am
My husband and I are financing a home in Arizona. We tried to get a loan modification when my husband's business slowed drastically in 2010. It's almost been a year of no payments, and finally, we find out we don't qualify. Relations between us are iffy & I asked if there was a way to keep the house - the agent suggested a quit claim. What are the repercussions of this on both my husband and I separately, or if we stay together?
a quit claim would remove one of the parties or more on the title to the property. the quit claim will not release liability on the mortgage. the mortgage, the only way to remove a party to the loan is to sell or refinance the home. if you bank was not helpful with the loan mod, you can short sell, or do a deed in lieu, which will be less drastic that full foreclosure. also you can try to contact naca, the non proffit organization that helps homeowners with loan mods.
What about taxes? If we stay together, will that affect how we file?
I am not a tax expert, but usually only one party gets the tax break for interest payments, if that was your second question. If you are married, then it will reflect on your joint return. If you file separate, then who ever is on the loan, will receive the tax benefit.