In a quit claim deed, one party is effectively giving up their interest in a shared property, allowing the other party to own it outright. However, while the ownership changes hands, the mortgage responsibility remains unaffected. One of the most frequent misconceptions regarding quit claim deeds in divorce cases is this one.
For instance, let's consider a quit claim deed divorce scenario where the husband signs over his right to the marital home to his wife. If they jointly obtained the mortgage initially, his name would still be on the loan. Even though he has transferred his property rights to his wife, the husband still shares the responsibility for the mortgage payments because his agreement with the lender remains valid. This means that if the wife defaults on the mortgage, it could impact the husband's credit rating despite him no longer own the property.
It's critical to consult a legal professional to navigate these potential issues when considering a quit claim deed divorce.