How To Get Your Name Off A Mortgage Loan

When you first got your mortgage, you might have applied with a spouse or other co-borrower to get better mortgage terms, split the financial responsibilities or simply because you wanted to live together.

But naturally, life happens, and things change. Maybe you’re getting a divorce, or you’ve decided you want to live on your own. Now you’re probably wondering how to get a name off a mortgage.

While it is certainly possible to remove a name from a mortgage, it isn’t always easy. In this article, our team at Southern Trust will discuss the most common options and alternatives for removing a name from your home loan and the necessary steps you need to take to do so.

Getting your name removed from a mortgage loan can be a complicated process but it may be necessary if your financial or living situation has changed. Being listed as a borrower on a mortgage loan is a big responsibility – you are legally obligated to repay the debt. So understandably you may want to get your name off the loan if circumstances shift.

In this comprehensive guide, we’ll explore the ins and outs of removing your name from a mortgage and provide actionable steps you can take.

Why Would You Want To Remove Your Name?

There are a few common scenarios that may lead you to want to remove your name from the mortgage loan:

Divorce or separation – After going through a divorce or breakup with your partner, you may want to remove your name from a jointly held mortgage. This can help provide a fresh start financially.
Protect your credit – If you co-signed on a mortgage loan but the primary borrower is struggling to make payments you may want to remove your name to avoid damage to your credit.
Gain financial flexibility – Removing your name from the mortgage gives you more freedom to take out other loans or lines of credit without that mortgage debt affecting your ability to qualify.
No longer live in the home – If you move out of the home with the mortgage but your name remains on the loan, you are still responsible for repaying it. Taking your name off can give you a clean break.

Whatever the reason, removing your name from a mortgage loan is rarely quick or easy, but it can be done with the right steps.

Refinancing Is The Most Common Approach

The most frequently used method to remove your name from a mortgage is to refinance the loan. With a refinance, the original mortgage loan is paid off and replaced with a new loan under different terms.

Here are some key things to know about refinancing to take your name off the mortgage:

You or the co-borrower will need to qualify for the new loan independently, meeting credit score, income, and debt-to-income requirements.
Closing costs for a refinance, including application fees, appraisal, and more, typically range from 2% to 5% of the total loan amount.
The co-borrower keeping the home can choose to refinance into their name only. Or you may both get new homes and refinance separately.
Interest rates and monthly payments may change with a refinance, depending on current market rates. Run the numbers to see if it makes financial sense.
A refinance can take 30-60 days to complete. Work closely with your lender to provide needed paperwork and get approved.

The refinancing process may seem daunting, but a knowledgeable lender can guide you through each step. Be sure to shop around with multiple lenders to find the best rates and terms.

Alternatives If Refinancing Isn’t An Option

For some homeowners, refinancing the mortgage simply isn’t a viable option. If you or your co-borrower don’t qualify financially for a new loan independently, the lender likely won’t approve a refinance.

In cases like this, here are a few alternative options to consider:

Loan Assumption

With a loan assumption, you transfer responsibility for repaying the mortgage loan to the other borrower. They would need to submit an application and be approved by the lender. You get your name removed from the loan, while they take over the payments.

Upside: No refinance required.
Downside: Loan assumption involves fees and requires lender approval.

Loan Modification

You may be able to modify the terms of your existing mortgage loan to remove one borrower’s name. This requires consent from the lender and they will want to ensure the remaining borrower can afford the payments.

Upside: No refinance required.
Downside: Not all lenders allow modifications, and qualifying can be challenging.

Selling the Home

If all else fails, selling the home and paying off the mortgage may be your only path forward. This removes both borrowers from the loan obligation.

Upside: Definitively ends your mortgage responsibility.
Downside: A stressful process, and selling in a down market can mean taking a loss.

Tips for Getting Lender Approval

As you explore your options for getting off the mortgage loan, lender consent and approval will be critical. Here are some tips for improving your chances:

Boost your credit score – Take steps like paying down debts and disputing errors to maximize your score before applying. This shows responsibility.
Lower your DTI – Reduce recurring debts and installment loans whenever possible. This improves your debt-to-income ratio.
Bring in a co-signer – Asking a family member with good credit to co-sign can improve the odds of approval substantially.
Offer security – Providing collateral like a CD or stocks/bonds may help satisfy the lender when removing your name.
Get professional support – Hiring a housing counselor or attorney to negotiate with the lender on your behalf can also help.

With perseverance and a strategic approach, you can get your name removed from a mortgage loan. Weigh your options carefully and don’t hesitate to get expert assistance. While it takes effort, the financial and mental freedom of no longer being obligated to that mortgage makes it worthwhile.

Where Do I Start?

If you and your co-borrower are ready to part ways but one of you plans on staying in the home, you’re going to have to figure out how to get your name (or your co-borrowers name) off the mortgage.

Once you and your co-borrower know who will be removed from the home loan, your lender can help you decide which removal option is best. They approved you once and they likely have the intimate knowledge of your finances necessary to decide if they want to do it again. However, you’re asking them to entrust the payment of your mortgage to one person instead of two, increasing their risk.

Quite a few borrowers don’t realize that both parties on a mortgage are responsible for the entire debt. For example, on a $500,000 loan, it’s not like both people are responsible for $250,000. You both are on the hook for the entire $500,000. If one of you can’t pay, the other person is still responsible for paying off the loan in its entirety. Therefore, if your lender simply removes one of the names off the current mortgage, one of you would be getting off scot-free so to speak. As you may have guessed, lenders are not often keen on doing this.

There are a few ways to remove a name from a mortgage, but refinancing is by far the most popular.

If you wish to have your name removed from the mortgage, consider speaking with your co-signer about the possibility of them refinancing in their name alone. Keep in mind that the equation has changed in terms of approval, as the lender is looking only at the financial variables for one person instead of two.

Do they have a high enough credit score to make sure they get a reasonable interest rate as the sole name on the loan? Is their income (not household, but their individual income) high enough to convince the lender that they can make the mortgage payments on their own? How does their individual debt-to-income (DTI) ratio look?

Once you determine that your co-borrower is willing and eligible to refinance on their own, they can explore the different kinds of refinancing options available.

Streamline refinance: If the loan is a Department of Veterans Affairs (VA) loan or Federal Housing Administration (FHA) loan, you may be able to use the VA Interest Rate Reduction Refinance Loan (IRRRL) or the FHA Streamline Refinance to remove a name and close faster than you would with a traditional refinance.
Cash-out refinance: A cash-out refinance lets you refinance your home and gives you a lump sum of money. In this scenario, the remaining borrower could use the lump sum to buy out the co-borrower and get their name off the mortgage. To qualify for a cash-out refinance, you must have 20% equity in the home.

How to Remove a Name From a Mortgage

FAQ

Can you remove a person from a mortgage without refinancing?

While refinancing is the most straightforward and obvious way to remove a person from a mortgage, that option isn’t always available or optimal. Doing so without refinancing is possible via mortgage assumption, loan modification or even bankruptcy.

How do you remove yourself from a mortgage loan?

You can remove yourself from the mortgage loan in two ways: release and refinance. If you talk to the mortgage company and present them with your divorce decree and a quitclaim deed, many lenders will remove you and leave the loan in your ex’s name only.

How do I remove my name off a joint mortgage?

Removing a cosigner or co-borrower from a mortgage almost always requires paying off the loan in full or refinancing by getting a new loan in your own name. Under rare circumstances, though, the lender may allow you to take over an existing mortgage from your other signer.

What is the best way to remove a name from a mortgage?

Yes, removing someone from a mortgage is possible, but the most common method is refinancing the loan solely in the name of the person who will retain ownership of the property. This involves obtaining a new mortgage that pays off the existing one, releasing the other party from their obligation.

How do I remove a name from a mortgage?

Depending on the situation, there are a few ways to remove a name from a mortgage, but refinancing is the most popular. Lenders may be willing to refinance your mortgage under a single homeowner. This is often the best way to remove a name from a mortgage and, in some cases, it may be the only way.

Can I remove a spouse name from a mortgage loan?

Let’s explore the options: 1.**Refinancing**: The most common way to remove someone from a joint mortgage is by **refinancing** the loan solely in the name of the person who will retain ownership of the

Can I remove a name from a joint mortgage loan?

If you want to remove a name from a joint mortgage loan, whether it is your name or the name of your co-borrower, it is possible to do so without refinancing. This situation might occur if a relationship breaks up or a living situation changes. However, each option has its downside and may not be successful.

How to remove someone from a mortgage without refinancing?

If you’re still wondering how to remove someone from a mortgage without refinancing, there is one final option, but it’s risky and should only be used as a last resort. You and your ex can agree to both stay on the mortgage. This could work, especially if both people decide to continue living in the house.