Profile picture for appreciateadvice

Can a co-borrower be dropped from a loan without having to refinance?

My husband co-owns a property and the mortgage that goes with it. He would like to be removed from the mortgage and the deed and have the other co-owner assume it. The co-owner is in agreement with this. Is a refinance necessary?
  • March 09 - Southington
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Answers (7)

Profile picture for appreciateadvice
I know it was originally FHA (taken in 2006) and was refinanced I believe in 2010 or 2011 - I'm guessing probably FHA again. If it is assumable, what is the process to make that happen? They owe more than it is worth (by 20-30K). 
  • March 11
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Is a refinance necessary?
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it's not necessary  if the loan is VA, FHA or if it's Fannie Mae and meets the Fannie Mae assumption requirements (in general Fannie Mae loans aren't assumable however Fannie Mae has a list of exceptions to this where it can be assumed). Contact your present lender.
  • March 10
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The short answer is most likely no.  Both borrowers qualified for the loan jointly and agreed to be responsible for the loan jointly.  One borrower cannot opt out of his responsibility simply because the other borrower agrees.



Steve McCoole
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  • March 10
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The co-owner will most likely need to have some form of a refinance to put your husband's name off the loan. The co-owner needs to have his own finances look at and evaluated to see if he can support the mortgage own his own. If this all works out in the refinance, then your husband's name can be removed. The best thing for you to do is to speak with a knowledgeable lender to see if you can get started on a refinance. If you need additional assistance, feel free to reach out. Good luck!
  • March 10
  • 0Yes

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Profile picture for Dan Tabit
DK,
Your lender is the only one who can answer this for you.  They are the lienholder and in most cases they won't want to release anyone's obligation, but you can ask.
  • March 09
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Profile picture for d33vb

Thanks.It is a 2 family house that the co-owner is living in and renting out the other floor. Does he have to prove he can cover the entire mortgage if the tenant moves out?

  • March 09
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Profile picture for wetdawgs
The co-owner needs to prove to the lender that the co-owner can carry the mortgage on his/her own merits.  So, yes, the co-owner will need to refinance to get your husband off the loan.  (If it is an assumable loan, then the assumption process requires demonstration of the financial merits of the assumer)
  • March 09
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