How to add, change or remove a name on a mortgage
Quick insights
- Modifying a mortgage to add, change or remove a name involves a formal process that requires lender approval and often entails a review of the borrower’s financial situation.
- Removing someone from a mortgage without refinancing may be possible through a mortgage assumption or release but typically requires lender approval and an assessment of the remaining borrower’s creditworthiness and income.
- Adding or changing a name on a mortgage requires lender approval and documentation and may involve reassessing the borrower’s financial situation and creditworthiness.
Starting a new chapter in life can be both exhilarating and unsettling, especially when it involves changes to your mortgage. Homebuyers may find themselves in situations where they need to add, change or remove a name from their mortgage.
Whether it’s due to a change in marital status, a shift in financial circumstances or other personal reasons, navigating these modifications can be complicated. Understanding the process, implications and available alternatives is crucial for making informed decisions. Let’s dive into these in more detail below.
Adding or changing a name on a mortgage
When you add someone’s name to a mortgage, this means you’re adding someone who is responsible for making payments and agrees to the terms and conditions to the loan.
Adding or changing a name on a mortgage involves a formal process that requires lender approval and documentation. When adding a new borrower, the lender will typically assess their creditworthiness and income to ensure they can share the financial responsibilities of the loan.
To add or change a name on a mortgage, you may want to:
- Contact your lender to discuss the process of adding someone to the loan and what documentation they require you to submit.
- Review the loan terms and assess the impact on the additional borrower’s financial obligations.
- Ensure the new borrower meets the lender’s requirements for creditworthiness and income.
Keep in mind that it’s helpful to understand the potential impact on the terms, including any changes to the interest rate or repayment schedule, if you are to add a person onto a mortgage. Be sure to review the loan documents to determine if there are any restrictions or requirements for adding or changing a borrower. Finally, check that the new borrower understands their financial obligations and responsibilities.
How to remove someone from a mortgage without refinancing
Removing someone from a mortgage without refinancing is possible but can be challenging. It typically requires lender approval and may involve assessing the remaining borrower’s creditworthiness and income. The process can be facilitated through a mortgage assumption or release, where the remaining borrower takes over the loan obligations.
Some reasons a lender may give you approval to remove a name from a mortgage include:
- Mortgage assumption, where one person “assumes” the responsibility of the mortgage.
- Showing documentation of a divorce decree or quitclaim deed, where someone voluntarily gives up the rights to the home.
- A borrower declares bankruptcy and their debt is discharged.
To remove someone from a mortgage without refinancing, you may want to:
- Contact your lender to discuss available options, including a mortgage assumption or release, and what documents they require when removing someone from a mortgage.
- Review the loan terms and assess the remaining borrower’s financial situation to determine the best course of action.
Note that removing someone from a mortgage without refinancing means that you are now solely responsible for the payments.
Considerations for removing co-signers
A co-signer is someone who agrees to take legal responsibility for a loan with the primary borrower (and they also may not own the asset). When a co-signer is involved, the lender can hold them responsible for making payments if the primary borrower defaults. If you plan to remove a co-signer from your mortgage, you may need to refinance your home so that you can put it solely in your name. Note that you may need to have a strong credit score and a healthy debt-to-income ratio to be approved for this type of refinance, among other factors.
If you’ve been approved for the new mortgage, you will need to file a quitclaim deed, which allows you to remove the name of the co-signer from the deed and transfer the house to your name only. Consider working with your lender and a lawyer to help you through this process.
In summary
Modifying a mortgage to add, change or remove a name can be a complex process, but understanding the available options and implications can help you make informed decisions. By reviewing the loan terms, assessing their financial situation and exploring alternative solutions, borrowers can navigate the mortgage modification process with the necessary knowledge. Whether you’re looking to add a new borrower, change a name or remove someone from a mortgage, it can be important to work closely with your lender to determine the best course of action for your specific situation.
