No. A quitclaim deed does not directly affect your credit score. The deed only transfers your ownership interest in a property from one person to another. Credit bureaus track debt payments, not property ownership. Your credit report shows your payment history on loans and credit accounts, not who owns real estate.
The problem starts when people think a quitclaim deed removes them from a mortgage. Federal law under 15 USC 1681s-2 requires lenders to report accurate payment information to credit bureaus. When you sign a quitclaim deed but your name stays on the mortgage, you remain legally responsible for the loan. The person who receives the property now owns it, but you still owe the debt. If that new owner misses payments, those late payments show up on your credit report because your name is still on the mortgage contract.
67% of Americans do not understand the difference between property title and mortgage liability, creating a dangerous trap that destroys credit scores.
What you will learn:
🏠 The exact difference between property ownership and mortgage responsibility under federal law
💰 How missed payments damage your credit score even after you transfer the property
⚖️ State-by-state variations in quitclaim deed recording requirements and mortgage liability
📋 Three common scenarios where quitclaim deeds create credit disasters (divorce, family transfers, estate planning)
✅ Specific steps to protect your credit when using a quitclaim deed
What a Quitclaim Deed Actually Does
A quitclaim deed transfers whatever ownership interest you have in real property to another person. The person giving up ownership is called the grantor. The person receiving ownership is called the grantee. The deed moves title from the grantor to the grantee with zero promises about the quality of that title.
The deed does not guarantee you actually own the property. It does not guarantee the property is free from liens. It does not guarantee anyone else has a claim to the property. The grantor simply says “I give you whatever rights I have, if any.”
This makes quitclaim deeds different from warranty deeds. A warranty deed includes legal promises that you own the property free and clear. A quitclaim deed includes no such promises. This is why quitclaim deeds work best between people who trust each other, like family members or divorcing spouses.
The deed must be signed by the grantor. The deed must include a legal description of the property. The deed must be notarized. The deed must be recorded at the county recorder’s office where the property sits.
Recording the deed makes the transfer part of public record. Without recording, the transfer might not be legally valid against third parties. Most counties charge a recording fee between $15 and $100.
The Critical Gap Between Title and Debt
Property ownership and mortgage liability are two separate legal concepts. Confusing these two concepts destroys credit scores and creates financial nightmares. Understanding this gap protects you from disaster.
Title means legal ownership of the property. Your name on the title gives you the right to live in the property, sell the property, rent the property, or modify the property. Title appears on the property deed filed at the county recorder’s office.
Mortgage liability means legal responsibility to repay the loan. Your name on the mortgage means you promised to make monthly payments to the lender. The lender can sue you for missed payments. The lender can report late payments to credit bureaus. Mortgage liability appears on the promissory note you signed when you borrowed money.
| Property Title | Mortgage Liability |
|---|---|
| Determines who owns the property | Determines who owes the debt |
| Appears on the deed | Appears on the promissory note |
| Filed at county recorder office | Held by the lender |
| Changed by signing a new deed | Changed only through refinance, assumption, or payoff |
| Gives ownership rights | Creates payment obligations |
A quitclaim deed changes title. A quitclaim deed does not change mortgage liability. This creates a dangerous situation where you no longer own property but still owe money for that property.
Mortgage lenders operate under joint and several liability. This means each person who signs the mortgage owes the entire debt, not just a portion. The lender can demand full payment from any borrower. If you and your ex-spouse both signed the mortgage, the lender can collect the full amount from you even if your divorce decree says your ex-spouse must pay.
How Credit Reporting Actually Works
Credit bureaus collect information from furnishers, which include mortgage companies, credit card companies, and other lenders. Federal law requires furnishers to report accurate information. Federal law prohibits furnishers from reporting information they know is false.
Mortgage companies report to three major credit bureaus: Equifax, Experian, and TransUnion. The reports include your name, account number, loan amount, payment history, and current status. Late payments show up as 30 days late, 60 days late, 90 days late, or in default.
Payment history makes up 35% of your FICO credit score. This makes it the single most important factor. One missed mortgage payment drops your credit score by an average of 52 points. Four missed payments drop your score by 98 points.
The credit bureau does not care who lives in the house. The credit bureau does not care who owns the house. The credit bureau only cares who signed the mortgage contract. If your name appears on the mortgage, your credit report shows that debt and any missed payments.
When you sign a quitclaim deed, the county recorder gets notified. The credit bureaus do not get notified. Your name stays on the credit report until the mortgage gets paid off, refinanced, or assumed by another borrower.
The Due-on-Sale Clause Problem
Most mortgages include a due-on-sale clause. This clause appears in mortgage contracts under federal law. The clause allows the lender to demand immediate payment of the entire loan balance when you transfer the property.
A quitclaim deed transfers the property. This transfer can trigger the due-on-sale clause. When triggered, the lender can demand full payment within 30 days. If you cannot pay, the lender can foreclose. Foreclosure destroys your credit score for seven years.
The Garn-St Germain Act at 12 USC 1701j-3 creates exceptions to the due-on-sale clause. These exceptions protect certain transfers. The most common exceptions include:
- Transfer to a spouse or ex-spouse through divorce
- Transfer to children of the borrower
- Transfer to a living trust where the borrower stays in the home
- Transfer through inheritance when the borrower dies
- Transfer to a relative after the borrower dies
These exceptions mean the lender cannot call the loan due when these specific transfers happen. The mortgage stays in place under the original terms. The original borrower stays responsible for payments unless the mortgage gets refinanced or assumed.
| Transfer Type | Due-on-Sale Triggered? |
|---|---|
| Sale to stranger | Yes |
| Gift to adult child | No (protected exception) |
| Divorce transfer to spouse | No (protected exception) |
| Transfer to living trust (borrower occupies) | No (protected exception) |
| Transfer through inheritance | No (protected exception) |
| Sale to investor | Yes |
The exception protects against foreclosure, but it does not remove your name from the mortgage. You remain liable for payments even though the property now belongs to someone else.
Three Scenarios That Destroy Credit Scores
Scenario One: Divorce Property Transfer
Sarah and Michael own a home together worth $400,000. They have a mortgage balance of $280,000. Both names appear on the title. Both names appear on the mortgage. They decide to divorce. The divorce decree states Michael gets the house and must make all mortgage payments.
Sarah signs a quitclaim deed transferring her ownership to Michael. The deed gets recorded at the county. Sarah no longer owns the property. Sarah moves out and rents an apartment.
Michael loses his job eight months later. He misses three mortgage payments. The lender reports the missed payments to all three credit bureaus. Both Sarah and Michael show 90-day late payments on their credit reports because both names still appear on the mortgage.
Sarah’s credit score drops from 720 to 615. She applies for a car loan and gets denied. She applies to rent a nicer apartment and gets rejected. The divorce decree said Michael must pay, but the decree does not control the bank’s rights. The bank only cares about the original mortgage contract.
| Sarah’s Action | Credit Consequence |
|---|---|
| Signed quitclaim deed | No immediate effect |
| Removed from title | No effect on credit |
| Name stayed on mortgage | Full liability remains |
| Michael missed payments | 90-day late reported |
| Credit score dropped 105 points | Cannot get new loans |
Sarah has two options. She can demand Michael refinance the mortgage in his name only. This removes her name from the loan and protects her credit going forward. She can also sue Michael for contempt of the divorce decree, but this does not stop the credit damage already done.
The correct approach: Sarah should have required Michael to refinance before signing the quitclaim deed. The divorce decree should state “Michael must refinance the mortgage within 60 days, and Sarah will sign the quitclaim deed only after the refinance completes.”
Scenario Two: Parent-to-Child Transfer
Robert owns a house worth $500,000 with a mortgage balance of $150,000. He wants to give the house to his daughter Emily as an early inheritance. Robert signs a quitclaim deed transferring the property to Emily. Emily now owns the house.
Robert’s name stays on the mortgage. Emily moves into the house and promises to make the mortgage payments. Robert moves to a retirement community. Emily loses her job and misses five mortgage payments. The lender reports the delinquency. Robert’s credit score drops from 780 to 640.
Robert wants to get a reverse mortgage on his retirement condo. The reverse mortgage lender sees the delinquent mortgage on Robert’s credit report. The lender denies Robert’s application. Robert cannot access the equity in his retirement home because of Emily’s missed payments on a house he no longer owns.
| Robert’s Action | Credit Consequence |
|---|---|
| Transferred house to Emily via quitclaim | No immediate effect |
| Name removed from title | No effect on credit |
| Name stayed on mortgage | Full liability remains |
| Emily missed 5 payments | 150+ day delinquency reported |
| Reverse mortgage denied | Cannot access home equity |
The Garn-St Germain exception protects this transfer from the due-on-sale clause because Emily is Robert’s child. The lender cannot demand immediate payment. However, the lender can report missed payments and can foreclose if payments do not resume.
The correct approach: Robert should have required Emily to qualify for a new mortgage or assumption. The lender would evaluate Emily’s income and credit. If Emily qualifies, the lender removes Robert’s name and adds Emily’s name. If Emily does not qualify, Robert should keep the property and let Emily inherit it after his death.
Scenario Three: Adding a Spouse After Marriage
Jennifer owns a condo worth $300,000 with a mortgage balance of $240,000. She bought the condo before marriage. She marries David and wants to add him to the title. Jennifer signs a quitclaim deed adding David as a co-owner. The title now shows “Jennifer Martinez and David Martinez.”
David’s name appears on the title. David’s name does not appear on the mortgage. Jennifer is the only person liable for the mortgage. Jennifer loses her job and misses mortgage payments. The lender reports the delinquency on Jennifer’s credit only.
David’s credit remains perfect. David qualifies for a new mortgage to buy an investment property. The mortgage underwriter sees Jennifer’s delinquent mortgage. The underwriter considers Jennifer’s debt-to-income ratio too high. The couple cannot buy the investment property together even though David’s credit is perfect.
| Jennifer’s Action | Credit Consequence |
|---|---|
| Added David to title via quitclaim | No effect on credit |
| Name stayed on mortgage alone | Jennifer remains solely liable |
| Missed mortgage payments | Only Jennifer’s credit damaged |
| David’s credit stays perfect | But joint applications suffer |
| Cannot buy second property | Jennifer’s debt-to-income too high |
This scenario shows the reverse problem. Jennifer wanted to share ownership but did not realize David would not share the debt. When financial trouble hits, only Jennifer suffers credit damage.
The correct approach: Jennifer should refinance the mortgage in both names and update the title in both names. This creates joint liability and joint ownership. Alternatively, Jennifer could keep the property in her name only and maintain the current mortgage. Adding someone to title without adding them to the mortgage creates confusion about financial responsibility.
Federal Law Governing Credit Reporting
The Fair Credit Reporting Act (FCRA) at 15 USC 1681 controls how credit bureaus and furnishers handle your credit information. The law protects consumers from inaccurate information. The law creates specific duties for mortgage lenders.
Under FCRA Section 1681s-2, furnishers must:
- Provide accurate information to credit bureaus
- Investigate disputes within 30 days
- Correct inaccurate information
- Stop reporting information they know is false
- Update credit reports when accounts change status
Furnishers must establish reasonable procedures to ensure accuracy. This means lenders must have systems to verify the information they report matches their internal records. When you dispute an item on your credit report, the lender must investigate and respond.
The FCRA does not require lenders to remove your name from a mortgage just because you sign a quitclaim deed. The lender reports based on the mortgage contract. The mortgage contract remains valid until paid off, refinanced, or assumed.
If a lender reports false information, you can sue under the FCRA. You can recover actual damages like lost opportunities for credit. You can recover statutory damages between $100 and $1,000 for willful violations. You can recover attorney fees if you win.
Common FCRA violations by mortgage lenders include:
- Reporting payments as late when they were on time
- Failing to update the account status after a loan modification
- Continuing to report a debt discharged in bankruptcy
- Reporting the wrong balance amount
- Failing to investigate disputes properly
A quitclaim deed does not create an FCRA violation. The lender correctly reports debt based on who signed the mortgage contract. Signing a quitclaim deed does not change that contract.
State Law Variations
Federal law sets the baseline for credit reporting and mortgage contracts. State law adds specific requirements for recording deeds and enforcing mortgages. These variations affect how quitclaim deeds work in practice.
Recording Requirements
Every state requires quitclaim deeds to be recorded at the county level. The specific office name varies by state: County Recorder, County Clerk, Register of Deeds, or Recorder of Deeds. Recording requirements include:
- Proper legal description of the property
- Grantor’s signature notarized
- Grantee’s full legal name and address
- Recording fee payment (varies $15-$200)
- Transfer tax payment in some states
- Preliminary Change of Ownership Report in some states
California requires a Preliminary Change of Ownership Report submitted with every deed. New York requires a Real Property Transfer Report. Pennsylvania charges a 1% local transfer tax plus a 1% state transfer tax. Florida requires no transfer tax on transfers between spouses or to correct errors.
States also require different acknowledgment formats. The notary acknowledgment must meet state-specific language requirements. Some states accept a simple notary seal. Other states require specific wording about the type of identification shown.
Deficiency Judgment Rules
When a property forecloses, the lender sells it at auction. If the sale price does not cover the full mortgage balance, the lender has a deficiency. A deficiency judgment allows the lender to sue the borrower for the remaining amount.
Deficiency judgment laws vary dramatically by state:
| State | Deficiency Allowed? | Special Rules |
|---|---|---|
| California | No | Cannot pursue deficiency on owner-occupied homes |
| Florida | Yes | Must file within one year of foreclosure |
| Texas | Limited | Only on certain non-homestead properties |
| New York | Yes | Must file within 90 days of foreclosure sale |
| Arizona | Yes | Must file within 90 days of foreclosure sale |
| Minnesota | No | Six-month redemption period bars deficiencies |
California bars deficiency judgments on owner-occupied residential properties foreclosed through a nonjudicial process. This protects borrowers from owing money after losing their home. The lender can still pursue you for missed payments before foreclosure, but not for the deficiency amount.
Florida allows deficiency judgments but requires the lender to file a separate lawsuit within one year. Maryland allows deficiency judgments and calculates the deficiency as the difference between the total debt and the fair market value of the property, not the sale price.
These rules matter when you sign a quitclaim deed. If the new owner stops making payments and the property forecloses, you might owe a deficiency judgment depending on your state. Your credit takes a double hit: foreclosure on your report and a judgment for the deficiency amount.
Community Property States
Nine states follow community property rules: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In these states, property acquired during marriage belongs equally to both spouses regardless of whose name appears on the title.
Community property rules affect quitclaim deeds signed during marriage. If one spouse signs a quitclaim deed giving up interest in community property, the other spouse might need to consent. The deed might be invalid without both signatures.
California requires both spouses to sign any deed transferring community property. Texas requires the non-owner spouse to sign a release if the property is homestead property. Arizona presumes property acquired during marriage is community property unless proven otherwise.
Divorce changes the analysis. Property division in divorce converts community property into separate property based on the divorce decree. A quitclaim deed signed as part of a divorce settlement transfers the property according to the court order.
Mortgage Assumption vs Refinancing
When you want to remove your name from a mortgage after signing a quitclaim deed, you have two primary options: assumption or refinancing. Both options change the mortgage contract, but they work differently.
Mortgage Assumption means the new owner takes over your existing mortgage under the same terms. The interest rate stays the same. The monthly payment stays the same. The remaining loan term stays the same. Your name gets removed from the mortgage. The new owner’s name gets added.
Not all mortgages allow assumption. FHA loans allow assumption. VA loans allow assumption. Most conventional loans do not allow assumption unless they are very old mortgages from before the 1980s. You must check your mortgage contract for an assumption clause.
The assumption process requires the new owner to qualify. The lender checks credit score, income, and debt-to-income ratio. If the new owner qualifies, the lender prepares an assumption agreement. The assumption fee typically ranges from $500 to $1,000.
The advantage: You keep the current interest rate, which matters when rates have increased since you got the original loan. If you locked in a 3.5% rate in 2020 and current rates are 7%, assumption saves thousands in interest.
The disadvantage: Many mortgages do not allow assumption. The process still requires lender approval and qualification.
Refinancing means the new owner gets a completely new mortgage at current interest rates. The new mortgage pays off the old mortgage. Your name comes off the old loan. The new owner’s name goes on the new loan.
Refinancing requires the new owner to qualify based on current lending standards. Credit score, income, assets, and debt-to-income ratio all matter. The lender orders a new appraisal. The lender charges closing costs typically 2-5% of the loan amount.
The advantage: The old mortgage gets completely paid off. Your name is removed. Your liability ends. You get a release document proving you no longer owe the debt.
The disadvantage: Current interest rates might be much higher than your original rate. Closing costs add up to thousands of dollars. The new owner must have good credit and sufficient income.
| Feature | Assumption | Refinancing |
|---|---|---|
| Interest rate | Stays the same | Current market rate |
| Fees | $500-$1,000 | 2-5% of loan amount |
| Availability | Limited to certain loans | Available for all loans |
| Qualification | New owner must qualify | New owner must qualify |
| Your liability ends | Yes | Yes |
| Processing time | 30-45 days | 30-60 days |
Both options require cooperation from the person receiving the property. If that person refuses to refinance or cannot qualify for assumption, you stay stuck on the mortgage. This is why you should never sign a quitclaim deed before the mortgage gets resolved.
Protecting Yourself When Using a Quitclaim Deed
Smart planning prevents credit disasters. Follow these specific steps when you need to use a quitclaim deed.
Step One: Verify All Loans Against the Property
Check your county recorder’s office for all liens against the property. A lien search costs $25-$50. The search reveals mortgages, home equity loans, property tax liens, mechanic’s liens, and judgment liens. Do not rely on memory or verbal assurances.
Order a title report from a title company. Title reports cost $100-$300 and show every recorded document affecting the property. The report includes mortgages, easements, covenants, and liens. Review every item before signing any deed.
Contact your mortgage lender directly. Ask for a payoff statement showing the exact balance, interest rate, and account number. Confirm whose names appear on the loan. Some couples discover only one spouse signed the mortgage even though both own the property.
Step Two: Demand Mortgage Resolution Before Signing
Never sign a quitclaim deed with the promise that mortgage resolution will happen later. Require refinancing or assumption to be completed first. Get proof in writing that your name has been removed from the loan.
Include specific language in any divorce decree or settlement agreement: “The parties agree that [Name] shall refinance the mortgage on the property within 90 days. [Other Name] shall execute a quitclaim deed only after receiving written proof from the lender that their name has been removed from the mortgage obligation.”
Set hard deadlines. Divorce agreements often include language like “If refinancing is not completed within 120 days, the property shall be listed for sale.” This creates consequences for delays and protects both parties.
Get an indemnification agreement. The person keeping the property should sign a legal document agreeing to indemnify you for any damages caused by their failure to pay the mortgage. This does not protect your credit, but it gives you the right to sue for financial compensation.
Step Three: Monitor Your Credit Report Monthly
Check your credit report every month for at least two years after signing a quitclaim deed. Federal law allows you to get one free credit report per year from each bureau through AnnualCreditReport.com. Stagger your requests (Equifax in January, Experian in May, TransUnion in September) to get year-round monitoring.
Look for the mortgage account. Verify the payment status shows current. Check that late payments do not appear. Verify the balance decreases each month if payments are being made.
Set up credit monitoring through your bank or credit card company. Many financial institutions offer free credit monitoring that alerts you to changes. The alerts notify you within 24 hours of new accounts, credit inquiries, or delinquencies.
If you see late payments, act immediately. Contact the person who received the property. Demand proof of payment. If they cannot pay, consider making the payment yourself to protect your credit. You can sue them later for reimbursement.
Step Four: Get Everything in Writing
Verbal agreements mean nothing when credit scores crash. Put every understanding in a written, signed document. Have the document notarized to prevent later disputes about authenticity.
Create a written agreement that includes:
- The exact date the quitclaim deed will be signed
- The exact date refinancing or assumption must be completed
- Who pays for refinancing costs
- What happens if refinancing gets denied
- Who makes mortgage payments during the transition period
- What happens if payments are missed
- Indemnification for credit damage
- Consequences for breach of the agreement
Attorney review protects both parties. Each person should hire their own attorney to review the agreement. The cost runs $500-$2,000 but prevents $50,000 disasters.
Record the agreement if your state allows. Some states permit recording of agreements related to real property. Recording creates public notice of the terms and makes the agreement harder to dispute later.
Step Five: Consider Title Insurance
Title insurance protects against defects in property ownership. An owner’s title insurance policy costs a one-time premium of $500-$3,000 depending on property value. The policy protects the grantee (person receiving the property) from claims that the grantor did not actually own what they transferred.
Quitclaim deeds provide zero warranties. If you receive property through a quitclaim deed and later discover the grantor did not own the property, you cannot sue the grantor. Title insurance fills this gap by paying for legal defense and covering losses.
Lenders require lender’s title insurance, but that policy only protects the lender. Owner’s title insurance protects you. The policy covers:
- Claims by previous owners
- Forged deeds
- Errors in public records
- Undisclosed heirs claiming ownership
- Liens that were not discovered in the title search
The policy lasts as long as you own the property. You pay once and get protection forever. Given the weak protections in quitclaim deeds, title insurance makes sense for grantees.
Common Mistakes That Destroy Credit
Mistake One: Signing Before Refinancing
The most common mistake is signing a quitclaim deed based on promises that refinancing will happen later. Divorce attorneys see this constantly. The divorce decree says one spouse will refinance. That spouse signs the decree intending to refinance. Time passes. Refinancing never happens.
The spouse who signed the quitclaim deed now has zero ownership and full mortgage liability. They cannot force refinancing because the decree did not make refinancing a condition of transfer. They cannot reclaim ownership because the deed is already recorded.
Never sign first. Require refinancing or assumption to be completed and documented before you give up ownership.
Mistake Two: Trusting a Divorce Decree to Protect Credit
Divorce decrees determine who owes what between the ex-spouses. Divorce decrees do not control what the lender can do. The lender is not a party to your divorce. The lender bases everything on the original mortgage contract.
Your divorce decree says your ex-spouse must pay the mortgage. Your ex-spouse misses payments. The lender reports late payments on your credit report. You sue your ex-spouse for contempt of court. The judge orders them to pay. Your credit is already destroyed.
You can sue your ex-spouse for damages. You might win a judgment. You cannot undo the credit damage that already happened. The foreclosure stays on your credit report for seven years.
Mistake Three: Assuming the Garn-St Germain Exception Removes Liability
The Garn-St Germain Act prevents lenders from calling the loan due in certain situations. The Act does not remove your name from the mortgage. People confuse these two concepts.
You transfer your house to your adult child using a quitclaim deed. The Garn-St Germain exception at 12 USC 1701j-3(d)(6) prevents the lender from demanding immediate payment. The mortgage stays in place under the original terms. Your name stays on the mortgage. You remain liable for payments.
Your child stops paying. The lender reports late payments on your credit. The lender forecloses. Your credit gets destroyed. The Garn-St Germain exception prevented the loan from being called due immediately, but it did not protect you from credit damage caused by non-payment.
Mistake Four: Adding Someone to Title Without Adding Them to the Mortgage
Couples often add a spouse to the property title after marriage without adding them to the mortgage. This seems harmless. It creates a mismatch that causes confusion during financial hardship.
The title shows two owners. The mortgage shows one borrower. When financial trouble hits, the non-borrower spouse thinks they share responsibility. They do not. Only the borrower’s credit gets damaged. Only the borrower’s income gets considered for refinancing.
When the couple wants to buy a second property, the borrower’s debt-to-income ratio includes the existing mortgage. The non-borrower spouse has perfect credit but the couple cannot qualify for a joint loan because the borrower carries too much debt.
The solution: When adding someone to title, refinance the mortgage in both names at the same time. This creates matching ownership and liability.
Mistake Five: Ignoring Joint and Several Liability
Joint and several liability means each borrower owes the entire debt. People think they only owe half if there are two borrowers. This is wrong.
You and your sibling inherit a property with a mortgage. Both names are on the mortgage through the inheritance. Your sibling says they will pay half, and you will pay half. Your sibling stops paying their half. The lender reports late payments on both credit reports because both borrowers are responsible for the full amount.
The lender can sue either borrower for the full debt. The lender can garnish either borrower’s wages. The lender can foreclose on the property. Both credit scores get destroyed.
Make the full payment yourself if the other borrower stops paying. Sue the other borrower later for reimbursement. Protecting your credit is more important than splitting costs fairly.
Do’s and Don’ts
Do’s
Do verify who is on the mortgage before signing a quitclaim deed. Call the lender directly and ask for a written statement showing all borrowers. County records show the mortgage, but they might not show assumption or modification documents.
Do require refinancing to complete first. Never sign a quitclaim deed based on future promises. Protect yourself by demanding proof that your name has been removed from the mortgage before you remove your name from the title.
Do get legal review for any quitclaim deed involving divorce, large property values, or complex financial situations. An attorney costs $500-$2,000 but prevents disasters worth tens of thousands of dollars.
Do monitor your credit monthly for at least two years after signing a quitclaim deed. Set calendar reminders to check each credit bureau. Look specifically for the mortgage account and verify payments show current.
Do make payments yourself if the other person stops paying. Your credit score is worth more than the monthly payment amount. Sue for reimbursement later. Protect your credit now.
Do record the deed properly at the county recorder’s office. Unrecorded deeds create title defects. Spend the $50-$200 to record correctly and avoid disputes later.
Do understand joint and several liability means you owe the full amount, not just half. Each borrower is responsible for 100% of the debt, not their proportional share.
Don’ts
Don’t sign a quitclaim deed thinking it removes you from the mortgage. The deed transfers ownership only. Mortgage liability changes only through refinancing, assumption, or payoff.
Don’t trust verbal promises about who will pay the mortgage. Get written, notarized agreements signed by all parties. Verbal promises mean nothing when your credit score drops 150 points.
Don’t assume divorce decrees protect you from lenders. The lender is not bound by your divorce agreement. The lender follows the original mortgage contract regardless of what your divorce judge ordered.
Don’t wait until after signing to think about credit protection. Plan ahead. Require mortgage resolution first. Sign the quitclaim deed last.
Don’t ignore late payments on your credit report. Dispute inaccurate information immediately through the credit bureau. Contact the lender if the other person is not paying. Consider making payments yourself to prevent further damage.
Don’t assume the Garn-St Germain exception removes your mortgage liability. The exception prevents the loan from being called due, but you remain responsible for payments.
Don’t add someone to title without considering mortgage implications. Mismatched title and mortgage create confusion and prevent future refinancing.
Pros and Cons of Quitclaim Deeds
Pros
Fast transfer process. Quitclaim deeds take minutes to complete and days to record. No title search is required. No title insurance is mandatory. You can transfer property today instead of waiting weeks for closing.
Low cost. Recording fees run $15-$200 depending on county. You can prepare the deed yourself using forms available online or at the county recorder’s office. Total cost stays under $500 if you avoid attorneys.
Simple paperwork. The deed requires basic information: grantor name, grantee name, property address, legal description, signature, and notary acknowledgment. No complex disclosures are needed. No inspections are required. No financing contingencies exist.
Works between trusted parties. Family members, divorcing spouses, and estate planning situations benefit from the simplicity. When you trust the other person and know the property’s condition, the lack of warranties does not matter.
Fixes title defects. Quitclaim deeds can correct errors in previous deeds, remove ex-spouses after divorce, clear up boundary disputes, or remove deceased co-owners. The deed cleans up title problems quickly.
Cons
Zero warranties or protection. The grantor makes no promises about ownership. You might receive nothing if the grantor does not actually own the property. You cannot sue the grantor if title problems appear later.
Does not affect mortgages. The deed transfers ownership only. Mortgage liability stays with the original borrowers. This creates the credit risk problem discussed throughout this article.
Title insurance difficult to obtain. Title companies resist issuing policies on quitclaim deeds because of the lack of warranties. If you can get a policy, it costs more and includes more exceptions.
Harder to sell later. Future buyers want warranty deeds. If you receive property through a quitclaim deed, you can only give the next buyer a quitclaim deed unless you purchase title insurance. This limits your pool of potential buyers.
Can trigger gift taxes. Transferring property for no payment might create gift tax liability if the property value exceeds the annual gift tax exclusion ($18,000 per person in 2024). The IRS treats quitclaim transfers as gifts unless consideration is paid.
| Feature | Advantage | Disadvantage |
|---|---|---|
| Speed | Completes in days | No time for due diligence |
| Cost | Under $500 typically | No title insurance protection |
| Complexity | Simple paperwork | No legal protections |
| Warranties | None needed between family | None provided to buyers |
| Mortgage effect | Not applicable if no mortgage | Liability stays with grantor |
How to Dispute Credit Report Errors
If a mortgage appears on your credit report after you believe your liability ended, you have the right to dispute the error. The Fair Credit Reporting Act creates a dispute process that credit bureaus must follow.
File a dispute with each credit bureau showing the error. Equifax, Experian, and TransUnion each have online dispute portals. Attach supporting documents like a release of liability from the lender, proof of refinancing, or an assumption agreement.
The credit bureau must investigate within 30 days. The bureau contacts the lender and asks them to verify the information. The lender must review their records and respond to the credit bureau.
If the lender cannot verify the information, the credit bureau must remove it from your report. If the lender verifies the information as accurate, it stays on your report. The bureau must send you the investigation results in writing.
You can also dispute directly with the lender. Send a letter to the lender’s customer service department explaining the error. Include copies of documents proving the error. Request that the lender correct the information with all three credit bureaus.
The lender must investigate your direct dispute if it relates to your liability for the debt, the terms of the debt, or your payment history. The lender has 30 days to investigate and respond.
If the lender refuses to correct information you believe is wrong, you can add a statement to your credit report explaining the dispute. The statement appears whenever someone pulls your credit report. You can also sue the lender for FCRA violations if they report information they know is false.
Signed a quitclaim deed but your name stayed on the mortgage is not an error. The lender correctly reports the debt based on the mortgage contract. Disputing this information will fail because the information is accurate. Your remedy is to refinance, not to dispute.
FAQs
Does signing a quitclaim deed remove me from the mortgage?
No. A quitclaim deed only transfers property ownership, not mortgage liability. Your name remains on the loan until refinancing, assumption, or payoff occurs.
Can a quitclaim deed hurt my credit score directly?
No. The deed itself does not affect credit. Missed payments by the new owner damage your credit because your name remains on the mortgage.
Do I need my spouse’s permission to sign a quitclaim deed?
Yes in community property states. No in common law states, but check if they’re on the mortgage before transferring title to avoid complications.
How long does a quitclaim deed take to process?
1-7 days. Signing and notarizing takes minutes. Recording at the county office typically processes within one week after submission.
Can I get a mortgage while my name is on another mortgage?
Yes, but it increases your debt-to-income ratio. Lenders count the full mortgage payment when calculating how much you can borrow.
Does the Garn-St Germain Act remove my mortgage liability?
No. The Act prevents the lender from calling the loan due immediately. It does not remove your name or payment obligation from the mortgage.
Can I sue my ex-spouse if they don’t pay the mortgage?
Yes, for contempt of divorce decree. But this does not prevent credit damage or remove late payments already reported to credit bureaus.
Will refinancing remove me from the mortgage?
Yes, if the other person refinances in their name only. The new loan pays off the old loan, ending your liability.
How many points does a foreclosure drop my credit score?
150-250 points typically. The exact amount depends on your starting score. Higher scores suffer larger point losses. Foreclosures remain for seven years.
Can I remove myself from a mortgage without refinancing?
Yes, through mortgage assumption. The lender must allow assumptions, and the new borrower must qualify based on credit and income.
Does a quitclaim deed protect me from property lawsuits?
No. You could still face liability for injuries or issues that occurred when you owned the property. Check with an attorney about lingering liability.
What happens if the property taxes aren’t paid after I sign a quitclaim deed?
Tax liens attach to the property, not the former owner. The new owner faces the lien. Your credit is not affected unless unpaid taxes existed before transfer.
Can I get the property back after signing a quitclaim deed?
Only if the new owner signs a quitclaim deed transferring it back to you. The transfer is permanent unless reversed by another deed.
Do I pay taxes when I sign a quitclaim deed?
Maybe. Transfers between spouses in divorce are tax-free. Transfers to children may trigger gift taxes if property value exceeds the annual exclusion amount.
How do I prove I no longer own the property?
Get a certified copy of the recorded quitclaim deed from the county recorder’s office. The deed with recording stamp proves the transfer occurred.
Can a lender stop me from signing a quitclaim deed?
No, unless your mortgage contract specifically prohibits transfer. Most mortgages use due-on-sale clauses instead, which trigger after the transfer, not before.
Will my homeowner’s insurance continue after a quitclaim deed?
No. The new owner must obtain their own policy. Contact your insurance company to cancel coverage and avoid paying for insurance on property you don’t own.
Does a quitclaim deed work if the property is in foreclosure?
Technically yes, but it does not stop foreclosure. The lender can still foreclose on the property, and you remain liable for the mortgage debt.
Can I use a quitclaim deed to avoid bankruptcy?
No. Transferring property to avoid creditors is fraudulent conveyance. The bankruptcy trustee can reverse the transfer and seize the property.
What is the difference between a quitclaim deed and a warranty deed?
A warranty deed includes promises that you own the property free of liens. A quitclaim deed includes zero promises and transfers only whatever interest you have.
Related reading
- Does a Quitclaim Deed Actually Protect You From Liens? (w/Examples) + FAQs
- Can a Quitclaim Deed Really Sell Your House? (w/Examples) + FAQs
- Does a Quitclaim Deed Remove My Name From the Mortgage? (w/Examples) + FAQs
- Does a Quitclaim Deed Affect Property Taxes? (w/Examples) + FAQs
- Can a Quitclaim Deed Stop Foreclosure? (w/ Examples) + FAQs
- What Exactly Happens After a Quitclaim Deed is Filed? (w/Examples) + FAQs
- Tax Consequences of a Quitclaim Deed Explained (w/Examples) + FAQs