Kate 7 July, 2012, 4:00 pm
So you cosigned a mortgage for someone, and now you want off of it. Whether it’s because the other person isn’t making up their share of the payments, or because they’re now in a position to handle a mortgage on their own, you want your name off the mortgage contract. But it was a big process just to get your name on there in the first place, how are you supposed to ever get it off?
In order to get your name, or your co-signers name, off a mortgage, home refinancing needs to be done so that a whole new mortgage can take the existing mortgage’s place. A name can’t simply be stroked off a mortgage document without a new agreement taking place; and to do this, refinancing or remortgaging will have to take place. If the person taking on the mortgage by themselves is going to be staying with the same lender, refinancing could be an option. If a different lender will be used, remortgaging will need to happen, in which a whole new loan will need to be obtained to pay off the existing mortgage. At that time, the new lender would then take over the loan and it would work as any other type of
mortgage between the lender and the borrower.
However, it’s also not only a simple matter of money changing hands from one lender to another and documents being changed. The borrower whose name will be staying on the mortgage will need to qualify on their own in order to be approved for a mortgage – whether they’re planning on staying with the same lender or not. This means that they may need to have a sizable down payment, and they most likely will need to have good credit. However, depending on how long they have already owned the home, and how much equity is in the home, they may be able to use that equity in order to help them qualify for the loan.
Putting the name of a co-signer on a mortgage isn’t really all that difficult; but taking it off can be. Refinancing and remortgaging can both become fairly complex processes that include a number of fees – including a prepayment fee if you need to break a mortgage in order to do it. When you need to walk through the process of removing a cosigner from a mortgage, speak to a qualified mortgage broker who can help; and who can find you a new lender with the best mortgage package, if needed.