How to Remove a Name From a Home Loan
Removing a name from a home loan generally occurs when a couple divorces or if a cosigner wants his name off the loan. A cosigner is someone who elects to offer funding for the loan in case the original borrower of the loan defaults or does not make monthly payments. In either scenario, removing a name from a mortgage loan is not easy, but can be done.
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Instructions
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See your loan representative to refinance the loan. Refinancing takes the remainder of the principle, or the amount left on the home loan, and creates a new loan with your name removed.
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See other bank lenders if your lender does not agree to a refinance. Your bank may not agree to a refinance if the remaining borrower has poor credit.
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Ask your lender to remove your name if no other lenders will refinance. Your lender may look at your individual situation and elect to remove your name.
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Keep making payments if you cannot get your name removed from a loan. In the case of divorce, make sure the bank is aware you are making the payments so these payments will reflect on your credit standing.
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Talk to an attorney if your ex-spouse is living in the house and not making home loan payments after a divorce. You may be able to have him or her removed from the home and take over the residence, provided you keep making the home loan payments.
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Check periodically with your bank to see if refinancing is an option. As you pay down the principle, the equity in the home rises, allowing the bank to reconsider a refinancing option.
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Tips & Warnings
Cosigning a loan carries certain risks and should not be taken lightly. Do not cosign a home loan with anyone who has a low credit rating. Should the original borrower quit paying, you become responsible for the payments, according to Loan.com. This could affect your debt-to-income ratio and hurt your credit rating if you cannot provide payments.
