In a few different situations, it is possible to have someone’s name removed from a mortgage. The following are the primary methods of changing a mortgage’s name without having to refinance it:
Although some of these options are undoubtedly more practical than others, we’ll attempt to explain the range of alternatives. Understanding your options can be aided by having a basic understanding of how mortgages operate. It also helps to be aware that, regardless of the reason, you require your lender’s permission if you want to remove a name from the mortgage.
Why would you remove a name from a mortgage?
For a variety of reasons, removing a name from a mortgage can be advantageous. For example, if you and your ex-spouse divorce and only one of you wants to keep the family home, you might need to legally remove the other person’s name before continuing. Another reason is that you might have frequently refinanced your home and don’t want to go through that process once more. Last but not least, a co-signer might want to have their name removed from a mortgage so they are no longer held accountable legally and financially for the mortgage payments.
Remove name from mortgage without refinancing
Most people think that in order to remove a name from their mortgage, they must refinance it, but that isn’t always the case. Some homeowners, for instance, decide to refinance their mortgage in order to pay off their ex-spouse so that they are no longer liable for it. To help homeowners or co-signers remove names from their mortgage agreement, however, several options are available without needing to refinance and borrow more money.
Here’s a step-by-step guide to remove a name from a mortgage without refinancing:
Use a loan assumption to remove a name from a mortgage
The simplest course of action for all parties concerned might be a loan assumption, so that should be your first choice. In essence, you can inform your lender that you will be taking full control of the mortgage when there are multiple names on it. You can ask them to give you a loan assumption, which exempts the other party from all documents and assigns one party full responsibility for the mortgage. This also has the advantage of processing more quickly because refinancing can take a while. When requesting full responsibility for a loan, a party may ask that the interest rate be kept the same.
It is crucial to request a release of liability from the other party. Having a release of liability would stop the lender from pursuing you for repayment if the other party who assumes full responsibility for the loan refuses to make payments. Remember that many lenders are reluctant to approve a loan assumption because there is no incentive for them to remove one person from the mortgage when there are already two people responsible for it. Therefore, those lenders who do approve loan assumptions will demand evidence that the person receiving the loan assumption has the financial means to pay the mortgage on their own.
Use a loan assumption to remove a name from a mortgage
You have the right to ask your lender to modify your loan. Although it may appear to be a refinance, this involves the parties to the mortgage asking for modifications to the loan’s terms without actually refinancing. With a modification, it is possible to ask for the removal of a name from the mortgage while maintaining the current interest rates. Some loan modifications, however, can also help to alter interest rates or lengthen a repayment schedule.
Many lenders will only permit a loan modification for borrowers who are in financial difficulty. Some lenders will, however, grant this request if you can provide sufficient justification, such as a divorce or legal separation.
Legally remove ex name from mortgage without refinancing
If you need to remove your ex’s name from a mortgage without refinancing, you could request a quitclaim deed (a legal document that allows you to transfer interest in real estate as a grantor to a grantee). In this situation, you are asking that your ex-spouse sign the quitclaim deed in front of a notary. In turn, the ex-spouse’s name would be removed from the property deed and they give up full control of their rights to the property.
Legally remove co-signer from mortgage without refinancing
A co-signer might want to stop being held accountable for a mortgage. In this case, the co-signer can seek a co-signer release. Through this program, the co-signer would no longer be responsible for the loan. To find out if this applies to your mortgage, it’s best to speak with the lender.
Would selling a house work to remove a name from the mortgage?
The option of selling the house is always an option for couples going through a divorce who decide that neither of them wants to continue living there. This would essentially remove all parties’ obligations to the mortgage. A short sale might be required to sell the property if the mortgage is deemed to be “underwater.” However, a short sale can negatively affect your credit score, and loan companies may occasionally require you to pay the difference between the short sale’s (foreclosure’s) proceeds and the remaining loan balance.
Summary of options to remove a name from a mortgage without refinancing
There are numerous ways to remove a name from a mortgage without refinancing. The simplest option is to assume the loan, but lenders may not always be willing to do so. Make sure to get in touch with the lender to learn more about your options and how to legally remove a name from a mortgage without having to refinance it.
How can a cosigner be removed from a mortgage?
It is almost always necessary to pay off the loan in full or refinance by taking out a new loan in your own name in order to remove a cosigner or co-borrower from a mortgage. However, in extremely uncommon situations, the lender might permit you to assume an existing mortgage from your other signer.
How long does it take to remove a cosigner from a mortgage?
Check to see if your loan has a cosigner release clause. If so, the lender will release the cosigner from the obligation. For instance, the lender might demand two years of on-time payments. If so, there would be a chance to have the cosigner removed from the loan after 24 consecutive months of payments.
When you cosign for a mortgage can you take your name off?
Fortunately, you can have your name removed, but depending on the cosigned loan type, you will need to take the proper steps. Essentially, you have two choices: You can allow the primary borrower to take full control of the debt or you can completely eliminate the debt.
How do I get a cosigner release?
After you graduate or complete your certificate, make 12 timely principal and interest payments, and satisfy certain credit requirements, you can apply to have your cosigner released from an open and active loan. Please note that only the borrower may request the release of a cosigner.