The title of a home is a legal document that is filed with the city or township where the property is located. Property title is a record of ownership, and it protects the owner from invalid claims against the property. The purchase of a property involves a transfer of the property deed, and a new title is recorded in the new owner's name. When you purchase a home with a co-borrower, such as a spouse or parent, both names are often included on the title. Removing a co-borrower from title is a simple process, but certain circumstances can complicate matters.
Sign a quitclaim deed, if you have no mortgage on the property, and your co-borrower is willing to be removed from the home title. A quitclaim deed is a simple document which both parties can sign to surrender ownership rights from one individual to another. You can find a sample quitclaim document online, or you can write a simple letter to the effect that one party is giving full ownership over to the other. You may also hire a real estate attorney to do this for you. Be sure to have the quitclaim deed notarized by an authorized notary.
Refinance the mortgage If you do have a loan on the property. If you currently maintain a mortgage on the property, doing a simple quitclaim deed may not be effective. It could even get you into trouble with the lender, since the lender might view a quitclaim deed as proof of a sale, in which case the lender would seek payment in full. Additionally, a quitclaim deed might remove an owner from the title, but it doesn't absolve the owner from responsibility for the mortgage. Refinancing the mortgage is the only way to completely remove a former co-borrower from the loan.
Contact your lender, and inquire about other options that may be available if you are unable to refinance the property. According to divorce attorney, Holstrom, Sissung, Marks & Anderson, APLC, some lenders may be willing to modify the mortgage document to remove a co-borrower. The lender may or may not review your current credit and income situation to determine whether this is a viable option. Be prepared to pay a fee for this service, if your lender provides it.
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