Taking a name out of a joint mortgage is easier by refinancing or selling the property. However, if refinancing is not possible, there are ways to take a name out of a mortgage. Since the loan is granted by a lender, the lending institution must be certain that the remaining borrower can fully meet the financial responsibilities for the loan. There are also options to take a borrower's interest off the home loan, but that borrower will still be financially responsible for the mortgage. The following options can be used to remove a name from a mortgage without refinancing.
Steps
Step 1. Contact the home loan lender
The lender will be able to determine if the type of loan you are paying can be changed with a novation deed. Novations are made in business and in the real estate sector. In the case of the novation of a loan, the lender agrees to enter into a new contract absolving a second party from any financial liability on the loan. All three parties (both debtors and creditor) must legally accept and sign all novation deeds. For the latter, a new contract with different conditions than the original loan will be required.
Step 2. Determine whether the remaining borrowers will have sufficient financial resources to pay the mortgage
The lender will require financial checks and asset documentation to show that the remaining borrower can pay off the loan. In most cases, individuals will need to have a high income to be eligible for novation. Creditors will also need to check all financial information of the debtor, including bank accounts, car, school or other loans, credit card debts or any other liabilities.
Step 3. Consider a Property Waiver
Contact an attorney who can advise you on how to enter into a title waiver, a document that removes a name from the real estate deed. A similar operation involves a licensor (the person whose name is removed) and a beneficiary (the remaining party responsible). The title waiver does not officially remove the name of the grantor from the financial responsibility of the mortgage, but gives the beneficiary the right to interest on the property.
Step 4. Sell the property if you are unable to remove the name in any other way
Selling the property is the only way to permanently remove a name from a mortgage, as the loan will be discharged and a new one created.
