is it possible to remove a co-owner from a mortgage so they

nikki0423 · Joined: 10 Jun 2008 Posts: 1 1.48 Dollars($)

Hi, is it possible to remove a co-owner from a mortgage so they can purchase their own mortgage. My inlaw and I both own my home. My inlaw has thier own home as well. They are getting older and are trying to purchase a multi-family home for themselves and us so that we can be there to care for them. They were approved for a new loan, only if their name is removed from my loan. As far as their own home loan now, they will have a renter. And as for my home, I plan on selling, but that could take a while because of my location and they need to do this now. My husband, sister inlaw, and I will be rotating staying with them in the mean time. How do we do this without refinancing my home? Will a quitdeed or reverse mortgage or anything else I am unaware of work?

laphillips

To remove a name from a loan you need to either refinance or pay off that loan. A quit claim deed only transfers title (ownership) not loan liability. A home needs to be owner occupied to receive a reverse mortgage - which, by the way, are only available to seniors.

smckaybiz · Posted: Tue Jun 10, 2008 5:11 pm Post subject:

Welcome to the forum! Very Happy

If you plan on selling the home I would just refi your first mortgage with a second mortgage loan. There is nothing stopping you from doing this and its much easier than going throught the whole traditional mortgage process. Most banks will waive all of the closing cost with a second mortgage loan. The only downside is that you can not have your taxes and insurance included in a second mortgage so you'll have to pay these seperately.

Best of luck

helping_user

Hi Nikki,

Are your in-laws co-owners as well as co-borrowers. If you do not refinance to remove the co-owner's name from the loan, one way of removing others from the loan is to do a novation. However, lenders do not prefer novation most often. But you can have a talk with your lender and find out what if he agrees. Regarding removal of the co-owner from title, you may use quitclaim deed and then sell off the property.

Regarding the reverse mortgage, well, it's a good financing option for seniors. By the way, are your in-laws planning to sell their own home? Or do they wish to take a reverse mortgage on their existing home and then use the proceeds to buy a multifamily home.

Thanks.

cliff · Posted: Wed Jun 11, 2008 6:23 am Post subject:

Hi Nikki and welcome to the forum,

This is pretty simple case. The only way to get your in-laws off of the mortgage would be as follows.

If you only need them off the property I would recommend and "warranty deed" this is a much more effective instruement and would fit your sitution.

If you need them off the loan and the property then a quit claim deed along with a refinance would be your only other option.

Hope this help. Very Happy

0.10 Dollars($)

Depending on the interest rate of the current mortgage and your income/debt picture, it can be more efficient to see if lender will release your in-law. There will be a fee but can cost less in the long run. Done all the time as an alternative to refinance.

cliff · Posted: Wed Jun 11, 2008 3:06 pm Post subject:

Interesting how is the in-laws interest legally changed. It sounds like they would be released from loan but what about their property interest?

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