Mortgage facts 2018 - How can you remove your name from a mortgage? [part 2]

In my previous post, we were talking about how you can remove your name from a mortgage. Here is the remaining part, hope you'll enjoy it.

4. Include the clause that will remove your name in the loan modification document

a. Ask your lender and negotiate that he would include the clause of your name removal in a loan modification contract. Many borrowers, who experience problems while making monthly mortgage payments, normally try to negotiate a Loan Modification agreement with the current lender. Through this Loan Modification Agreement, partners can lower the monthly mortgage payment, extend the loan tenure, and can remove their names too. If the existing partner, who is staying on the mortgage, fulfils all the financial criteria, the Loan Modification Agreement can be helpful to remove your name from a mortgage.

b. Next, you should submit an application for Loan Modification to the lender along with the documents showing your financial situation. The lender will check the documents of the existing partner of your joint mortgage. As informed earlier, the existing partner must bear the monthly payment all by himself. In the application, the existing partner must also include why he wants to reduce the monthly payment and remove one partner’s name from the mortgage.

c. The lender will receive the Loan Modification application and approve after verifying all the documents. The lender will then send a Loan Modification agreement to you and the new terms will be stated over there. The monthly payment on the Loan Modification agreement should be lower than the original mortgage payments.

d. Consult an attorney to review the agreement. The attorney will check the agreement and assure you that the agreement is drafted properly and your name is removed from the mortgage. The attorney may also certify that your name is also not associated with the property on the county’s property records.

5. Assume the mortgage

a. Contact your lender and ask if it allows an assumption of the loan option for you. An assumption of a mortgage is taking over the loan entirely by one of the partners. This will remove the name of the other partner from the mortgage. The person staying on the mortgage (your partner) will have to follow the original interest rate, repayment tenure, existing balance and contract terms. Loans issued by the FHA and the VA are normally assumable. Many other conventional loans are not assumable. So, you must confirm first with your lender that if it is an option available.
b. You must also ask your partner if he or she would like to assume the mortgage. If he or she agrees, ask for required documentation showing his/her financial affordability to pay the mortgage. Those documentation might include past tax returns, pay stubs, and bank statements.
c. Contact your lender and ask an assumption of the mortgage. Your partner (The person staying on the mortgage) have to provide his/her affordability proof to the lender that he or she can afford the monthly mortgage payments alone.

d. You’ll receive a notification of approval of your assumption from the lender if it approves your assumption request. The lender will send an assumption agreement and ask your attorney to review the agreement and check all the terms. The attorney can also draft and file property records mentioning that you are no longer listed as co borrower.

6. Paying off the mortgage entirely

a. Ask your partner (co-borrower) if he or she is interested in paying off the mortgage entirely and owning the property alone. If so, he or she can pay off the mortgage and “satisfy” the loan entirely. Since the original loan will be paid off, there will be no partner on it any longer.

b. Consult the attorney and take suggestions for the mortgage pay off. An attorney will help you to prepare the documentation properly. The attorney may also prepare and file property records to transfer the ownership of the property to another person.

c. You must collect all the documentation regarding the mortgage, make sure that you receive the mortgage satisfaction document from your lender or from your attorney.

I hope the above given methods can really help you remove your name from a mortgage. To be on a safer side, it is better to consult a mortgage attorney before you proceed.