Transferring a mortgage to a single cosigner is not always easy. If two borrowers qualified for the loan, the person who will remain on the mortgage will need to qualify again, but this time without the other borrower. If you are taking a name off the mortgage, you might also want to remove the name from the deed. Divorce is a common reason to transfer ownership to a sole borrower. Even with a divorce decree specifying the change, you must obtain financing.
Meeting the Credit Criteria
Check your credit before refinancing. You can obtain a free copy of your credit report from Equifax, Experian, and TransUnion by visiting the FTC recommended annualcreditreport.com. Although the site doesn't provide your credit score, you can review your credit report to check for negative accounts and collections. If your credit isn't exactly perfect, you might want to explore FHA refinance options. FHA loans offer more flexible credit guidelines. If you do not have much equity in your home, FHA can also be the better choice.
Applying to Refinance
Contact your lender to discuss refinancing. Shop different lenders to get the lowest interest rate. In addition to meeting the credit requirements, you will also need to prove your income is sufficient enough to pay the new mortgage payment. Lenders will have you complete a Uniform Residential Loan Application. The application requests basic personal and financial information.
The lender will need documentation to proceed with reviewing your application. Provide the lender pay stubs for the past couple months, your recent bank statements and tax returns for the past two years. If the application is approved based on the information you submit, the lender will need additional documents, including an appraisal of the home and property, a title report and a homeowner's insurance binder.
The deed conveys ownership, so if you don't want the other party owning half of your home, remove the party from the mortgage and the deed to the home. Refinancing requires another closing. At the closing, you will sign lots of paperwork, just as you did with the original mortgage. The borrower you are removing only needs to be present to sign the quitclaim deed. A quitclaim deed is a document that allows the cosigner to transfer his interest in the home to you. A new deed will be issued solely in your name.
- How to Transfer a Mortgage to a New Owner
- Can You Refinance Without a Spouse's Signature?
- Do You Need an Appraisal on an Assumption?
- How to Get a Mortgage With a Co-Signer
- Do I Need a Co-signer to Apply for Home Equity?
- Can You Cancel a Cosigner Relationship?
- How to Remove a Co-Borrower From a Home Title
- Non-Occupant Co-Borrower Mortgage Regulations