Ask Money

Hidden liabilities, a mortgage and a marriage

Chris Farrell Dec 8, 2010

Question: My husband and I have been married about 4.5 years, and before getting married I asked him about any loans/debts he had. He said he had none. To make a long story short, shortly after filing taxes together the first year we discovered that he had not paid his taxes for 5 years. It has taken us several years, but we’ve finally completed paying off all past taxes, interest, and penalties.

Also about 2 years ago, we went to get a loan to buy an RV, but we didn’t qualify. The reason? He had another small loan which he hadn’t paid for years. We paid that off. And I also discovered that his name is on the mortgage of his ex-wife! Unfortunately he signed onto this mortgage after he divorced (for stability for his son), but didn’t realize how that would impact his future. Now we are unable to purchase any other large ticket items. We’ve thought about buying some property for a retirement home also, but we haven’t even gone to ask about it. I know I can’t qualify on my salary alone. On my name alone I have the house, my car, and his car.

Is there any way to get his name off of her mortgage? Do you have any other advice for me who is obviously married to a man who is not such a good money manager? Thank you for any advice. Alice, Greensboro, NC

Answer: You have big money and trust issues to confront.

But to your specific problem of the moment, he cannot remove his name from the mortgage unless his ex-wife agrees to sell the house or refinance the mortgage.

A sale is a straightforward solution, but probably unlikely especially in today’s moribund housing market. If she agrees to refinance the mortgage and take his name off the loan, the lender won’t do the deal unless she qualifies on her income for the mortgage. A carrot on the refinancing option is that mortgage rates are attractive at a national average of 4.74% (although they are up a bit from an average of 4.57% last week).

I am concrned about you finding out over time about hidden liabilities. You probably don’t need me to remind you, but a lack of trust over money erodes relationships. It isn’t surprising that we’re often attracted to someone that is different from us with money. For instance, savers like it when spenders convince them to take a vacation and spenders are happy to build up a fund for financial emergencies.

It’s charm often turns into conflict with time, juggling a mortgage, credit card debt and living expenses while trying to find a bit to stash away for retirement. In your case, a lack of money trust compounds the normal stress of a relationship. I’d find a therapist, a marriage counselor, a trusted advisor, a professional that can help you forestall future surprises. This shouldn’t be happening.

For Richer, Not Poorer: The Money Book for Couples by Ruth Hayden offers practical ways to build that trust and money partnership.

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