FHA loan--wife assuming for co-signer

Guest 0.10 Dollars($)

I have an FHA loan. I am the primary borrower and my step-mom is the co-signer. I am married and at the time of getting the loan my wife was studying for the bar exam and was not yet employed, thus the need for a co-signer.

Now my wife is employed. Assuming she is credit worthy, how likely would a lender be to just allow my wife to assume the obligation of my step-mom on the mortgage (effectively a novation), and let us release my step-mom from liability. Do you think this would be preferable to a refinance? From what I've read, it seems this process would avoid a lot of expense.

adonis

Welcome hog,

If your wife has the required financial ability and creditworthiness to take over the obligation of your step-mom on the mortgage, then the lender may allow her to do so. But in this case, the loan has to be refinanced thereby adding your wife on it as the cosigner.

Guest 0.10 Dollars($)

If assumption is allowed then it will be more preferable as the rate would remain the same. On the other hand if it would be required to refinance thne the rate will depend on the current values.

Niicss · Posted: Tue Jul 17, 2007 3:50 pm Post subject:

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