How can I remove my name from a mortgage with my ex
It's important to understand the ramifications of what can happen when the name on a home's title is not on the mortgage loan. Understanding the roles and responsibilities of all parties involved can help avoid future conflict and confusion.
Leaving a person's name off the mortgage technically excludes them from financial responsibility for the loan. However, it is important to note that the bank can claim payment from any owner if the home is facing foreclosure. Although it will not affect your credit if you are not a mortgage borrower, the bank can repossess the property if loan payments are not made. This is because the bank has a lien on the title to the home.
In other words, if you want to continue living in the house, you will have to continue making those mortgage payments if the person listed in the house does not, even if you are not obligated on the mortgage note. Otherwise, the bank can repossess the house. If you become the only person responsible for making payments in the future, you can refinance the house in your name.
If my name is on the deed but not on the mortgage, can I refinance?
If you're interested in getting your name removed from a mortgage, there's likely to be a big change in your life. Whether it's a divorce, marital separation, or simply a desire to have the mortgage in one person's name so that the other has a little more financial flexibility, circumstances have clearly changed compared to when the mortgage was taken out. Sure, taking out the mortgage together had some clear benefits, like leveraging both incomes when determining how much you could get and/or using two people's credit scores to lower your interest rate. At the time it made sense, but life happens and now, for whatever reason, you've decided it's time to remove someone from the mortgage. Frankly, it's not the easiest process in the world, but here are some steps and considerations to help you get there.
The first thing is to talk to your lender. They approved you once and likely have the intimate knowledge of your finances to decide if they want to do it again. However, you are asking them to entrust your mortgage payment to one person instead of two, increasing their liability. Many borrowers don't realize that both people on a mortgage are responsible for all of the debt. For example, on a $300.000 loan, it's not like both people are responsible for $150.000. Both are responsible for the entire $300.000. If one of you is unable to pay, the other person is still responsible for paying the entire loan. So if the lender just removed one name from the current mortgage, one of you would be off the hook. As you may have already guessed, lenders are not usually in favor of doing this.
If my name is on the mortgage it's half mine
There are countless reasons to sign a mortgage with a romantic partner, friend, family member, or business associate when purchasing property in California together. The idea of co-owning or helping someone qualify for a mortgage may seem like a good idea at first, but it can lead to problems down the road if you decide to back out of the mortgage or want to end the co-ownership relationship. The relationship may deteriorate over time or you may be concerned about your co-owner's financial means to repay the loan. You may want to invest in your own property, but you can't get a loan on a second property because you're already responsible for the debt on the first. You may want to equity in your valuable California home, but your co-borrower refuses to sell it. Your credit report may show defaults or your credit score is lower than it would otherwise be because your co-borrower is not paying the mortgage on time.
It stands to reason that your co-borrower would want you to continue with the loan, but what benefit do you get? After all, you are not receiving any benefit from this property, but your co-borrower is using your equity to receive a discounted mortgage. Having you on the mortgage gives lenders the security of knowing that someone else is responsible for the full amount of the loan in case your co-borrower defaults on the loan. By removing yourself from the mortgage, the burden of the entire loan falls on your co-borrower, something neither the bank nor your co-borrower is excited about.
How much does it cost to take someone out of a mortgage?
Our mortgage brokers are experts in the policies of more than 40 lenders, including banks and specialized finance companies. We know which lenders will approve your mortgage, whether it's to pay for a divorce or an estate settlement.
You cannot "take over" or withdraw from the mortgage. While in other countries you can take over someone else's mortgage or cut someone out of a mortgage deal, in Australia this is not allowed.
We also have access to specialized lenders who can take into account your situation, no matter how many payments have been missed! However, you must show that you were able to afford those refunds even if you did not make them.
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