Here in our forum on LoanSafe.org one question we seemed to be asked quite often is “How do I remove my name off a mortgage?”
Especially during this economic crisis more people than ever are searching for ways to make sure they are no longer responsible for their home. Even though this may sound irresponsible to some, there are various reasons why an individual would be pursuing this.
Whether you went through a divorce, broke up with boyfriend/girlfriend, or no longer want to share a mortgage with the co-owner, you will want to figure out a way to get you name free and clear from the loan. Unfortunately, this is easier said than done because once you are on a mortgage, it is almost impossible to get out of that contract. Most lenders will never allow a borrower to escape these contracts and anyone who says they can help you is probably a scammer.
Well this is a harsh reality to this situation and hopefully you are in good standings with the other borrower on the property and that borrower is able to refinance. I say this because really the only way to get your name of the mortgage note is to have the other borrower refinance the property into their name only. To do this they would need excellent credit, sufficent income to cover the monthly payment and enough equity in the home for a lender to consider the risk.
This is a lot of times very difficult to achieve because many times both the borrowers no longer want to pay the mortgage because problems they are facing with the other person. People will sometimes deliberately quit paying the mortgage when the other borrower moves out just so they can purposely destroy the others credit rating, or the possibility the lender will pursue a judgement against the owner. This is an all to common event and I feel sorry for any borrowers stuck in this terrible position. In this position there will not be the option to refinance because now both of the borrowers on the loan have terrible credit and cannot qualify for a refinance.
Therefore if you are in good standings with the other borrower on the mortgage, and are just looking for a way to move on without that person, than have that person apply for a refinance right away. If they do not have funds needed to secure the refi, it would be wise of you to help them out with extra cash to get your name off the mortgage as soon as possible. As long as the other borrower has decent credit and can afford to pay the mortgage on their own, you should have no problem removing your name from the title and mortgage.
But with the housing market in such horrible condition, about one fourth of all homeowners owe more on their mortgage than their property is currently worth. If you happen to be in this position a refinance will be very difficult to achieve.
The other obvious option you have is to sell the home. As long as you and the co-borrower agree to the sale, than this may be the easiest way to get your name removed from the mortgage.