Fred and Wilma immediately hit it off and after a few dates over Brontosaurus burgers, they announce their intention to get married and move into the quaint little rock ranch next door while rates are low.
The property is in Fred’s name. How can Fred get Barney on the title to the old property so he can continue living there? They’d use a quitclaim deed.
What’s a Quitclaim Deed?
Whether you live in the town of Bedrock or New York City, a quitclaim deed is an easy way to transfer rights to the use of property.
The form for the deed may vary slightly, but the way they work is pretty standard. In a situation where you’re not selling the property, you can grant your ownership interest to someone else. This can be useful when you’re trying to add your new spouse to the property title, remove them after a divorce or to help clear up who owns inherited property.
A quitclaim deed often includes consideration for the person’s property interest if they’re being removed from the title. This consideration amount is listed on the quitclaim deed and also helps local authorities determine any transfer taxes that are due.
If you’re looking to remove your ex-spouse from the title on your property, you’ll need to show a copy of the divorce decree or marital settlement agreement to be able to take them off the loan. This is so the mortgage lender can make sure the divorce has gone through. It also lets them know if there’s any monetary restitution due to the party being removed from the title and helps verify transfer tax.
If you’re separated when buying a house, your spouse will still have to sign all the paperwork and you can get a quitclaim done once your divorce is final.
Limitations of the Quitclaim
There are some limitations on a quitclaim that you should know about before handling all your property transfers this way.
It’s important to note that the execution of a quitclaim deed doesn’t necessarily mean that the person had ownership rights to give you. Instead, it means the person is transferring over any right they may have had in the property to you.
For this reason, if anyone is trying to give you property through a quitclaim, make sure you know what your property rights are. You want to know going in if anyone else has ownership interest. Using a quitclaim deed in a traditional sale is risky.
Of course, Fred’s Home Loan Expert at Quicken Loans would walk him through all of this.
Do you still have questions on quitclaims? Leave us a note in the comments and we’ll do our best to answer them.
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