How to Remove Your Name From a Mortgage
When a loan for a house is made, important legal documents are executed. A promissory note details the terms to repay the loan. The deed states who owns the property. And the mortgage provides legal recourse for the lender to take ownership of the house and sell it to repay the note if required payments are not made. Typically, the parties on all the documents are the same. But divorce or other circumstances may necessitate a name being removed from these documents. The deed can be changed rather easily. However, the primary route to formally remove a name from the mortgage and note is to refinance the loan.
Other People Are Reading
Instructions
-
-
1
Contact the loan servicer and determine if the loan is assumable. If this option is available, the remaining parties on the loan would provide proof that they can repay the loan on their own. The servicer/lender would then release the other person from liability. A fee is generally charged for the loan assumption. However, most loans do not have this option.
-
2
Apply to refinance the loan without the party that is to be removed from the mortgage. All standard procedures for refinancing a loan would apply.
-
-
3
Allow the person to remain on the mortgage if a refinance is not the best course of action. The person is removed from the deed and does not have rights to the property. If the remaining party does not make payments as required by the note, then the servicer/lender can foreclose upon the house. According to the Woman's Divorce website, the credit history of the person that no longer has an ownership interest in the property would be adversely affected. This is the least desirable option to remove a name from a mortgage after divorce.
-
1
Tips & Warnings
Consult with an attorney when removing a name from a mortgage in connection with a divorce or other complicated circumstances.
