How to Get Someone’s Name Off a Home Loan

Getting someone’s name off a home loan can be tricky, but it is possible through a few different options. When a couple takes out a mortgage together and then splits up, one person usually wants to keep the house Removing the other person from the loan allows them to move on financially while the remaining homeowner takes over full responsibility Here’s what to know if you need to remove an ex-spouse or other co-borrower from your home loan.

Why Remove a Name From a Mortgage?

There are a few key reasons you may want to remove someone’s name from the mortgage loan on a home:

• Divorce – If you and your spouse are divorcing, taking one person’s name off the mortgage separates that financial obligation. This allows the remaining homeowner to keep the house without the involvement of the ex-spouse.

• Separation – Even if you are not legally divorcing, removing an ex-partner from the mortgage removes their financial stake in the home if you split up.

• Affordability – If your income has increased since getting the original mortgage, you may now qualify for the loan on your own. Removing the other borrower takes their income out of consideration.

• Credit issues – If the co-borrower has had credit problems since getting the mortgage, taking their name off gets rid of the risk of their low credit score impacting interest rates.

Removing a name formally takes the other person off the hook for mortgage payments. This separation of financial liability is usually important for both parties after a breakup.

Refinancing to Remove a Name

The most straightforward way to remove someone’s name from the mortgage is to refinance the home loan in your name only. This process involves applying and qualifying for a new mortgage to pay off and replace the existing one.

When you refinance, you’ll go through similar steps as getting a purchase mortgage:

• Submit a mortgage application with proof of income and assets
• Get your credit checked
• Have the home appraised
• Receive loan estimates and disclosures
• Have title search and insurance performed
• Sign closing documents

Refinancing to remove a co-borrower often has advantages beyond just a name change:

• Lower interest rate – Current rates are likely lower than when you got your original mortgage. Refinancing can reduce your rate and monthly payments.

• Shorter term – You may be able to refinance into a 15 or 20-year mortgage and pay off your home faster.

• Cash out equity – If you have equity, you can cash some out through a refinance to pay your ex their share.

• Lower payments – Refinancing into a longer term can reduce your monthly mortgage costs.

While convenient, refinancing does come with some drawbacks:

• Closing costs – You’ll need to pay closing costs that can range from 2% to 5% of your mortgage balance.

• Qualifying challenges – You’ll have to qualify for the new mortgage based on your individual income and credit score.

• Mortgage rates – Current rates fluctuate and may be higher than your existing rate when you refinance.

Alternatives to Refinancing

If refinancing won’t work for your situation, you may have some alternatives:

• Loan assumption – You take over the mortgage in your name only with approval from the lender.

• Loan modification – The lender modifies the original loan terms to remove the other borrower.

• Sell the home – Selling the home pays off the mortgage and releases both borrowers.

• Pay off mortgage – Making a lump sum payment to pay off the entire mortgage can remove both borrowers.

However, for many mortgages, refinancing will be the only option presented by the lender. Loan assumption and modification depend on specific mortgage terms and lender policies.

Steps to Remove a Name Without Refinancing

If your lender allows alternatives to refinancing, here are some steps to remove a name:

1. Review mortgage documents – Check your mortgage paperwork to understand your lender’s policies, loan type, and any clauses about removing borrowers.

2. Consult your lender – Ask your mortgage servicer about assumption or modification options to take over the loan or alter terms.

3. Propose a plan – Formally request the lender to allow assumption or modification and propose how it will work.

4. Provide paperwork – Supply necessary documents like divorce decree, income statements, and consent from the other borrower.

5. Pay any fees – Loan assumption or modification may come with fees from 1% of the balance or higher.

6. Sign new paperwork – Both borrowers will likely need to sign forms to officially modify the loan.

7. Transfer title – File paperwork like a quitclaim deed to transfer property title to the remaining homeowner.

8. Update records – Formally document the name removal with your county records office and mortgage servicer.

Taking these steps does not guarantee the lender will agree to remove the other borrower without refinancing. But it is worth exploring as an alternative if refinancing is not an option for you.

Pros and Cons of Removing Someone Without Refinancing

Let’s look at some of the key advantages and disadvantages of removing a name from the mortgage without a refinance:

Pros

• Avoid refinancing costs like application fees, appraisal, and closing costs

• May allow you to stay on the same interest rate and term

• Can be quicker than refinancing if lender approves assumption or modification

• Allows you to remove the borrower without impacting your existing loan

Cons

• Loan assumption or modification fees can still be 1% or higher

• Not all lenders permit assumption or modification

• Refinancing guarantees name removal; alternatives depend on lender approval

• Remaining borrower must still prove affordability on their own

• Less opportunity to adjust interest rate, loan term, or cash out equity

For many homeowners, the certainty and benefits of refinancing outweigh the costs. But for some, avoiding a refi may be better if the lender cooperates.

Removing Names from Mortgages and Titles

Remember, taking a name off the mortgage loan only separates that financial obligation. You’ll also need to remove the co-borrower from the home’s title to transfer full ownership.

A quitclaim deed signed by the other owner and recorded transfers their interest in the property title to you. If refinancing, the title company handles the name change on the title automatically.

Consult a real estate attorney to ensure the title gets updated properly. This legally completes the full separation of the other person from both the mortgage loan and the home.

Key Takeaways on Removing Someone From a Mortgage

Getting someone’s name off of a home loan requires navigating mortgage rules and legal property ownership issues. But in most cases, it is feasible. Here are some key tips:

• Refinancing the mortgage in your name only is usually the best approach if you can qualify and afford closing costs.

• Alternatives like loan assumption and modification are dependent on specific lender policies so check with them first.

• Remove the other owner from both the mortgage loan and property title for a complete separation.

• Explore pros and cons of each method carefully to choose what works best for your situation.

• Consult mortgage and legal experts for guidance on the best options and proper paperwork.

While frustrating, removing an ex-spouse or partner from a mortgage is possible with determination and care. Following proper procedures protects your home ownership rights and removes lingering financial connections after a relationship ends.