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Can I remove a Cosigner WITHOUT Refinancing?

Posted on: 21st Mar, 2010 12:19 pm
Thanks in advance for your replies.

Here is my situation:

I'm 21 years old and own my own business. I started the business in January of 2009 so according to loan regulations, I cannot qualify for a mortgage on my own due to only having just over a year of self employment history. The house I am (or should I say hope I can) purchase is $139,900. The seller has accepted our offer and our closing date is fast approaching. I know I make enough money to afford the house on my own, not to mention my girlfriend (who is not on the loan) will be living with me and helping out a little bit.

Enter my Dad as cosigner. We have been working with a mortgage broker, but a few questions have yet to be answered. What we really need to know is this:

In 12, 18, or 24 months, will he be able to remove his name from the loan and title WITHOUT me having to COMPLETELY refinance? I want to avoid the cost of appraisal and all the closing costs since it will be at most around 18 months away, but also want him to be able to remove himself from the loan so he is not in debt to the property and can pursue another rental property or anything else that might come into his life.

I have read a zillion different responses on the web to this question, but none of them really seem to answer it in detail. The most favorable answer I have seen is that, granted the lender is willing, he would be able to remove his name from the loan and title for roughly $500 assuming my income is substantial, which it is already right now (but they can't count me) and will be at that time.

The other option, obviously, is to refinance. This is something I do NOT want to do because I've been told it could cost upwards of $4000, not to mention right now we are getting a 5.0% interest rate on our FHA loan which probably won't be around too much longer.

The broker has submitted the loan application through Wells Fargo, if that makes any difference.

Here is another question: My business is actually a corporation now and although I'm the only employee, I am paid a salary. Would it be off base to go to a lender and say I have recently became employed at ACME, Inc. and show my pay stubs to avoid saying that I'm actually self employed. I have heard that lender are sometimes more likely to lend to people who just recently finished college and have started a new job.
Welcome schugtrent,

Your father would be able to cosign for the loan so that you would be able to buy the property. However, if you want to remove your father as a cosigner of the loan, then you will have to refinance the loan. Also, you would be able to refinance the loan only if there is equity in the property and if you satisfy the required criteria of the lenders.

As far as the second option is concerned, it would depend upon the lender whether or not you would get a loan. You need to speak to your lender about your plan and check out if he can help you.
Posted on: 21st Mar, 2010 08:42 pm
I already know he can be a cosigner. What I'm asking is: Can he be REMOVED WITHOUT REFINANCING.

I have read that some loans can be "assumed" by one of the parties involved if approved by the current lender on the loan and the other party can be removed.

I read this on another forum:

"If you and the other co-borrower have parted company, it would be in the best interest of the other person to remove you from the mortgage as well as the title to the property. If the loan is FHA or VA, they have a provision for a FULL QUALIFYING ASSUMPTION. The other person would have to document their ability to carry the loan by themself. This would cost about $500 processing by the lender, as well as title fees (and possibly a 1/2% VA Funding Fee for VA loan). Some Conventional loans may allow this. This, or a refinance should be done so that you both can go on with your lives without needless financial ties."

After 18 months I should be able to "document my ability to carry the loan by myself."
Posted on: 21st Mar, 2010 09:08 pm
Lenders will want to refinance the loan in order to remove the cosigner from the loan. However, if the assumption clause is mentioned in the loan documents, then you can try for it.
Posted on: 22nd Mar, 2010 02:31 am
I basically did this. My dad was my cosigner and about 4 years later, after I was married and didn't need his name on the mortgage any more I completed the paperwork for a "formal assumption". My mortgage was through chase and it took a few months and lots of required documentation, but it was completed.
Posted on: 07th Feb, 2011 10:53 am
i would like to know how can i take the person off my car loan and put it under me alone, without me refinanceing. my credit score is good now, but they say my credit line is not enough..please help me! i only have 25 days left.
Posted on: 11th May, 2011 05:35 pm
Hi yvette!

Welcome to forums!

Unless you refinance the existing car loan, you won't be able to remove the other person from the loan docs.

Feel free to ask if you've further queries.

Sussane
Posted on: 11th May, 2011 11:20 pm
What do I need to do to get my boyfriend removed as cosigner on my mortgage if the title is in my name only? And I don't have any contact with him and he is still married to his wife. As a cosigner if he dies dies his wife have any rights to the property he bought for me if the title us in my name only?
Posted on: 03rd Apr, 2012 11:03 pm
Hi Lesa!

Welcome to forums!

You will have to refinance the mortgage in your name in order to remove your boyfriend's name from the mortgage docs. If his name is not mentioned on the property deed, then his present wife won't be able to claim any share from your property after his death.

Feel free to ask if you've further queries.

Sussane
Posted on: 04th Apr, 2012 11:42 pm
are there any credit impacts on either party if an assumption of the mortgage is made? also the original mortgage has been modified and both parties suffered credit score loss through this process.
Posted on: 02nd Jul, 2012 11:02 am
Hi lana!

Welcome to forums!

Assumption of the mortgage won't lead to any kind of drop in your credit scores.

Feel free to ask if you've further queries.

Sussane
Posted on: 03rd Jul, 2012 12:32 am
are lo doc refinance loans still available? my girlfriend is divorced, she retained the home with about 40% equity in it.but needs to have her ex s name removed from the loan per the court ruling. she has no documented income to speak of, she is newly self employed...although she can easily afford the low monthly note...any options other than conventional refinance where she wont qualify
Posted on: 02nd May, 2013 08:18 am
Posted on: 02nd May, 2013 10:10 pm
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