How can I protect my interests from a quit claim deed?
October 3, 2017 2:19 PM Subscribe
I am being asked to sign a quit claim deed to what will in reality be a marital home, which I will be paying most of the mortgage on. Is there anything I can do to protect my interests?
My credit is very bad, despite my income, so my husband has been the one getting the loan for the house. Money has been mingled, so at least some portion of the down payment is coming from our joint account, and we are intending that I will be paying most of the mortgage in the future. I will be living in the house immediately following closing with my husband and child. However, the title company has asked that I be present at signing and that I sign a quit claim deed to the property. I am really nervous about this - I don't anticipate a divorce, but I also don't want to be left high and dry in case of one!
Questions:
1) Is there anything we or I could do that could later negate the quitclaim?
2) How screwed would I be?
3) Would it matter that I would be the one paying the mortgage from my bank account, or that we have mingled funds, if I have already signed a quitclaim?
4) What do I do? halp.
This is in the state of WA.
My credit is very bad, despite my income, so my husband has been the one getting the loan for the house. Money has been mingled, so at least some portion of the down payment is coming from our joint account, and we are intending that I will be paying most of the mortgage in the future. I will be living in the house immediately following closing with my husband and child. However, the title company has asked that I be present at signing and that I sign a quit claim deed to the property. I am really nervous about this - I don't anticipate a divorce, but I also don't want to be left high and dry in case of one!
Questions:
1) Is there anything we or I could do that could later negate the quitclaim?
2) How screwed would I be?
3) Would it matter that I would be the one paying the mortgage from my bank account, or that we have mingled funds, if I have already signed a quitclaim?
4) What do I do? halp.
This is in the state of WA.
You make enough money to hire a lawyer to specifically and in detail go over ALL documents to look out for your interests, only your interests, to make sure you do not get screwed at any point in this process. Hire a lawyer for yourself and ask them these questions.
posted by jbenben at 2:27 PM on October 3, 2017 [6 favorites]
posted by jbenben at 2:27 PM on October 3, 2017 [6 favorites]
Is there anything we or I could do that could later negate the quitclaim?
Nothing you could do accidentally; someone has to re-deed the property to you if you've quitclaimed it.
Really, a real estate lawyer is the person to talk to -- it sounds like this is really messy, not cut-and-dried, you need professional legal advice. Generally, who is paying the mortgage is matter between the payer and the bank, and it has nothing to do with the mortgage or deed itself. However, in the event of divorce the court can order one party or the other to make changes based on things like where the money actually came from to pay for the house. Like I said, it can be messy. The documents filed (deeds, mortgages) are pretty straightforward about what they do and how they take effect, but as you recognize future legal action can force changes to happen.
posted by AzraelBrown at 2:28 PM on October 3, 2017 [2 favorites]
Nothing you could do accidentally; someone has to re-deed the property to you if you've quitclaimed it.
Really, a real estate lawyer is the person to talk to -- it sounds like this is really messy, not cut-and-dried, you need professional legal advice. Generally, who is paying the mortgage is matter between the payer and the bank, and it has nothing to do with the mortgage or deed itself. However, in the event of divorce the court can order one party or the other to make changes based on things like where the money actually came from to pay for the house. Like I said, it can be messy. The documents filed (deeds, mortgages) are pretty straightforward about what they do and how they take effect, but as you recognize future legal action can force changes to happen.
posted by AzraelBrown at 2:28 PM on October 3, 2017 [2 favorites]
A lot of this is a matter of state law, but a quitclaim deed is literally giving up every and all right you might have in the property. Your husband will not be able to transfer an interest in the house back to you without the consent of the mortgagee.
However, Washington is a community property state and most property acquired jointly after marriage belongs to both parties. I don't know if a quitclaim deed can be effective against that. That's why you need proper legal advice.
posted by praemunire at 2:29 PM on October 3, 2017 [11 favorites]
However, Washington is a community property state and most property acquired jointly after marriage belongs to both parties. I don't know if a quitclaim deed can be effective against that. That's why you need proper legal advice.
posted by praemunire at 2:29 PM on October 3, 2017 [11 favorites]
I am not a lawyer, but I have signed a quitclaim in WA after a divorce. I would not sign a quitclaim in your circumstance, but as others have suggested, this is one of those times when you absolutely must consult a lawyer.
posted by Kwine at 2:31 PM on October 3, 2017 [4 favorites]
posted by Kwine at 2:31 PM on October 3, 2017 [4 favorites]
Alas, not just a real estate lawyer, but also a family lawyer.
There may not be an easy solution, though. The lender's policies will require, or strongly prefer, that every owner of the property be a borrower of the mortgage. With two or more borrowers, the lender's policies will set the amount and eligibility of the mortgage based upon (at best) the average FICO and in most cases weighted to the lower FICO. So, the way to get the loan terms your husband can get on his FICO is for you to be a non-owner; given the default co-ownership (equitable or legal) that a wife obtains in a primary family home acquired during the marriage ... you need the quitclaim.
A family lawyer may be able to provide you an ante-nuptial agreement, whereby it's acknowledged that your husband would in event of a divorce make you whole for the home equity that you are buying for him. The real estate lawyer would need to make sure that this was kosher with the various gifting rules applicable to borrower qualifications.
posted by MattD at 2:55 PM on October 3, 2017 [7 favorites]
There may not be an easy solution, though. The lender's policies will require, or strongly prefer, that every owner of the property be a borrower of the mortgage. With two or more borrowers, the lender's policies will set the amount and eligibility of the mortgage based upon (at best) the average FICO and in most cases weighted to the lower FICO. So, the way to get the loan terms your husband can get on his FICO is for you to be a non-owner; given the default co-ownership (equitable or legal) that a wife obtains in a primary family home acquired during the marriage ... you need the quitclaim.
A family lawyer may be able to provide you an ante-nuptial agreement, whereby it's acknowledged that your husband would in event of a divorce make you whole for the home equity that you are buying for him. The real estate lawyer would need to make sure that this was kosher with the various gifting rules applicable to borrower qualifications.
posted by MattD at 2:55 PM on October 3, 2017 [7 favorites]
a quitclaim deed is literally giving up every and all right you might have in the property.
Not necessarily. A quit claim deed is often a way to transfer partial ownership to Joint Tenents With Right of Survivorship (JTWROS). Both husband and wife would have equal ownership and in the event of the death of one, the other receives the full ownership. This is often desired because without it there is the possibility that the surviving spouse would only get half a house with the other half going to the deceased spouse's family. In the event of divorce, you each retain half ownership.
So you aren't necessarily giving up everything with a quit claim deed, just half in the event of divorce. This is fairly common transaction in a marriage if you don't want your spouse to become homeless in the event of an untimely death.
But you need to consult a lawyer to find out exactly the purpose.
posted by JackFlash at 3:28 PM on October 3, 2017 [1 favorite]
Not necessarily. A quit claim deed is often a way to transfer partial ownership to Joint Tenents With Right of Survivorship (JTWROS). Both husband and wife would have equal ownership and in the event of the death of one, the other receives the full ownership. This is often desired because without it there is the possibility that the surviving spouse would only get half a house with the other half going to the deceased spouse's family. In the event of divorce, you each retain half ownership.
So you aren't necessarily giving up everything with a quit claim deed, just half in the event of divorce. This is fairly common transaction in a marriage if you don't want your spouse to become homeless in the event of an untimely death.
But you need to consult a lawyer to find out exactly the purpose.
posted by JackFlash at 3:28 PM on October 3, 2017 [1 favorite]
This can lead to a lot of messiness later - please consult a real estate attorney. Title insurance companies are not your advocate here.
As just one example, if you pay into the mortgage and live in the house, you may be considered a part owner, regardless of other paperwork filed. This can also cause tax issues when you later sell the house. Which is just to say this is really complicated and you're doing a non-standard thing. So please consult an attorney.
posted by mercredi at 3:37 PM on October 3, 2017
As just one example, if you pay into the mortgage and live in the house, you may be considered a part owner, regardless of other paperwork filed. This can also cause tax issues when you later sell the house. Which is just to say this is really complicated and you're doing a non-standard thing. So please consult an attorney.
posted by mercredi at 3:37 PM on October 3, 2017
Definitely talk to a lawyer. FWIW, my husband is the only one on the mortgage and deed for our house, the payments are made from our joint account and we each pay half the mortgage every month, and I did not have to sign a quitclaim deed when we bought the place, nor when we refinanced.
posted by banjo_and_the_pork at 6:49 PM on October 3, 2017 [2 favorites]
posted by banjo_and_the_pork at 6:49 PM on October 3, 2017 [2 favorites]
I agree you need to speak with a property and/or family lawyer in the jurisdiction.
posted by snuffleupagus at 6:50 PM on October 3, 2017
posted by snuffleupagus at 6:50 PM on October 3, 2017
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posted by brainmouse at 2:26 PM on October 3, 2017 [14 favorites]