How to Remove a Name from a Mortgage

How to Remove a Name from a Mortgage

Removing a name from a mortgage is not easy. Usually, a lender can approve a mortgage with two people because they have double the income in compassion to their debts. The better the debt to income ratio, the easier it is to qualify someone for a mortgage. 

If the loan gets reduced to only one borrower with one income, this reduces the income significantly, thus affecting the debt to income ratio. It will always be more difficult for a lender to qualify someone on one income rather than two.

Discuss Name Removal with Your Lender

If you believe that you have enough income and a good enough credit score to qualify for your mortgage on your own, you can talk to your lender to see if you might qualify to keep the loan as it is currently written, but remove one of the borrowers. 

Your lender might have you submit a lot of the same documentation that you had to submit when you first qualified for the mortgage in order to make sure all of your finances are square. Then, if you do qualify and the lender approves your request for a name removal, they can remove the other person from the loan and release the other co-borrower from their debt and liability. 

Refinancing a Loan to Remove a Name

If your lender is not able to qualify you for your mortgage loan alone, you might be able to refinance your home to get it in your name alone. Another lender might have more flexibility, or you might be able to refinance and get an FHA loan, in order to qualify by yourself. 

Sales and Assumption 

The last option to remove someone’s name from a mortgage is an assumption or selling the home. Sometimes, a mortgage is what is known as “assumable,” which means that someone else can take over the loan.

If your mortgage is not assumable and you are out of options, you might have to sell your home. Since most people usually do not want to sell their homes, you should make sure that you talk to your lender and real estate agent to explore all of your options.

There are several ways you can go about removing someone from your mortgage depending on your financial situation. Talk to your lender and agent to learn more about how.