Removing a cosigner or co-borrower from a mortgage almost always requires paying off the loan in full or refinancing by getting a new loan in your own name. Under rare circumstances, though, the lender may allow you to take over an existing mortgage from your other signer.
Removing a name from your mortgage: Can it be done without refinancing? Yes, it is possible to take sole responsibility for a home that you're currently sharing without refinancing, even if your ex-spouse or another co-borrower or cosigner is currently on the mortgage.
Some lenders have a release option for co-signers, according to the Consumer Financial Protection Bureau. A release can be obtained after a certain number of on-time payments and a credit check of the original borrower to determine whether they are now creditworthy.
To get your name off of someone's car loan you have the option to request a co-signer release. Selling or trading in the vehicle is another way to remove a co-signer from a car loan. If these aren't options, you can ask them to refinance the loan without you.
Pay off the loan
If this is a manageable option, you must contact the lender and pay off the current balance along with the payoff amount. Once the loan is paid off in full, the responsibilities of both the primary borrower and the co-signer will end.
Equal rights: The co-borrower has equal rights to the car as the primary borrower.
Sell the car: If you sell your car to someone else and use the money you get to pay off the rest of the loan in full, you'll release both yourself and the cosigner from your payment obligations.
The co-buyer's rights to the vehicle allow the co-buyer to take possession of the car if you fail to pay — and even if you don't, because you're equal owners — and you'll need the co-buyer's permission to sell the car later. A cosigner has no ownership rights but might be harder to find.
This can be done by refinancing the car loan and making either one of you the sole owner of the vehicle. Refinancing is the only way to remove a co-borrower from an auto loan.
Both parties become co-credit applicants, taking on the financial risk of the mortgage together. This means the co-borrower essentially owns the house too, whether they live in it or not.
When you work with a co-borrower, lenders will view their financial details alongside yours, giving both equal weight. Once your mortgage application is approved, your co-borrower will have the same legal rights to the property and the same mortgage responsibilities as you..
Fortunately, you can have your name removed, but you will have to take the appropriate steps depending on the cosigned loan type. Basically, you have two options: You can enable the main borrower to assume total control of the debt or you can get rid of the debt entirely.
If the borrower forged your signature, or if they committed fraud to enforce you to sign the loan contract, you can sue both the lender and the primary borrower to have your name removed. However, you'll need unquestionable proof that you did not willingly consent to cosign the loan.
In addition to no longer being responsible for the new loan, the removed co-borrower receives the credit benefits of showing a loan paid in full. For this process to take place, your co-borrower will need to agree. With help from Gravity lending, removing a co-borrower has never been easier.
It can affect your credit scores.
Because a co-signed loan is recorded on your credit reports, any late or missed payments can have a negative impact on your credit scores. If the borrower defaults on the loan and ceases payment, the debt may be referred to a collection agency.
The terms co-borrower, co-buyer, co-applicant and joint applicant all basically refer to the same role — someone who shares in equal ownership of the loan and car. They are also equally responsible for making car payments from the start. A co-borrower is often a spouse or partner.
To get a co-signer release you will first need to contact your lender. After contacting them you can request the release — if the lender offers it. This is just paperwork that removes the co-signer from the loan and places you, the primary borrower, as the sole borrower on the loan.
Lenders are reticent in providing information about whether cosigner release is an option, so you will likely have to inquire directly with your lender. Take advantage of the sample letters for requesting a cosigner release that CFPB has posted on their website.
While it is possible to remove a co-signer from a loan, simply replacing one co-signer with another on the original loan is unlikely. The process is more complex and can involve refinancing the loan, completing co-signer release paperwork or simply paying the loan in full to end the co-signer's involvement.
Legally remove co-signer from mortgage without refinancing
In this case, the co-signer can seek a co-signer release. This is a program that would allow the co-signer to remove their obligation from the loan. It's best to speak with the lender to determine if this is something that applies to your mortgage.
You may be wondering if you can go about removing a cosigner from a car loan, and the answer is yes, you can. Often, you can simply contact your lender to get a cosigner released, but sometimes it can be more complicated.
If the lender won't change the existing loan, your co-borrower will need to refinance the home into a new mortgage. Does it cost to remove a name from a mortgage? Yes. Refinancing to remove a name requires closing costs, typically ranging from 2% to 5% of the loan balance.