Posted on: 20th Apr, 2010 01:42 pm
Hi,
My sister purchased a house a while back on her own. She added my name to the title/mortgage via a Simple Assumption (i.e. no credit check, no refi, etc.) so that I could talk to the lender regarding PMI on the loan (on her behalf).
We finally got the PMI situation resolved and now I have a need to purchase a second home. It comes to my attention that the debt on her mortgage is also my debt. :(
So, the question is how do I remove my name from her mortgage (I never signed or co-signed the loan/note). My name is currently not on the deed to the home. Do I need to hire a real estate attorney or is there a simpler way?
Thank you for any feedbacks.
--
-oj
My sister purchased a house a while back on her own. She added my name to the title/mortgage via a Simple Assumption (i.e. no credit check, no refi, etc.) so that I could talk to the lender regarding PMI on the loan (on her behalf).
We finally got the PMI situation resolved and now I have a need to purchase a second home. It comes to my attention that the debt on her mortgage is also my debt. :(
So, the question is how do I remove my name from her mortgage (I never signed or co-signed the loan/note). My name is currently not on the deed to the home. Do I need to hire a real estate attorney or is there a simpler way?
Thank you for any feedbacks.
--
-oj
hi oj,
when you assumed the mortgage you also took over the responsibility of the loan. it means that you have the liability to make the mortgage payments and in case your sister fails to make a payment, the lender can come after you.
to take your name off the mortgage, the lender will probably ask your sister to refinance the loan solely in her name. it seems unlikely that the lender would release you from the liability of the loan till the time the mortgage is refinanced. however, discuss this issue with the lender and check out if your name can be removed from loan without the refinance.
when you assumed the mortgage you also took over the responsibility of the loan. it means that you have the liability to make the mortgage payments and in case your sister fails to make a payment, the lender can come after you.
to take your name off the mortgage, the lender will probably ask your sister to refinance the loan solely in her name. it seems unlikely that the lender would release you from the liability of the loan till the time the mortgage is refinanced. however, discuss this issue with the lender and check out if your name can be removed from loan without the refinance.
thank you, jenkin7.
hmm...so, they (the lender) didn't want to do a refi when my name was added. now, a refi is required to remove my name? if that's the case, it's going to cost her $$$ to close the refi. that just doesn't seem right.
i wonder why can't another simple assumption (or novation) be done in this case?
thanks once again.
hmm...so, they (the lender) didn't want to do a refi when my name was added. now, a refi is required to remove my name? if that's the case, it's going to cost her $$$ to close the refi. that just doesn't seem right.
i wonder why can't another simple assumption (or novation) be done in this case?
thanks once again.
To OJ,
When your name was added, the lender did not require a refinance because at the time you were taking over the responsibility of the mortgage. From the lender's point of view, it was good because this made both your sister and you liable for the loan and in case any of you default on the loan, the lender has the option to come after the other.
However, when you take your name off the loan you leave your sister as the only person liable for the mortgage and the lender might consider this as a risky affair. This is why they might want the mortgage to be refinanced to remove you from the loan. But it all depends on your lender and it is worth you while to check with him what exactly he wants.
When your name was added, the lender did not require a refinance because at the time you were taking over the responsibility of the mortgage. From the lender's point of view, it was good because this made both your sister and you liable for the loan and in case any of you default on the loan, the lender has the option to come after the other.
However, when you take your name off the loan you leave your sister as the only person liable for the mortgage and the lender might consider this as a risky affair. This is why they might want the mortgage to be refinanced to remove you from the loan. But it all depends on your lender and it is worth you while to check with him what exactly he wants.
Hi OJ,
Thank you for asking your question here on MortgageFit.
Jenkin7 provides some solid advice but I would like to add that a novation may still be possible. You would need to contact the lender and they would need to determine if that's allowable under the current circumstances. In many cases, that is all that needs to be done but please keep in mind that your sister would need to qualify for the mortgage on her own whether the lender proceeds with a novation or a refinance.
Please let us know if you need any further assistance.
Thank you for asking your question here on MortgageFit.
Jenkin7 provides some solid advice but I would like to add that a novation may still be possible. You would need to contact the lender and they would need to determine if that's allowable under the current circumstances. In many cases, that is all that needs to be done but please keep in mind that your sister would need to qualify for the mortgage on her own whether the lender proceeds with a novation or a refinance.
Please let us know if you need any further assistance.
Thank you, Michelle.
We've contacted the lender and they wanted us to go through a refinance to remove my name from the title. So, look like it's going to cost $$$ to close the refi.
We'll contact a real estate attorney to see if we can do so with a novation instead.
Thank you all once again.
We've contacted the lender and they wanted us to go through a refinance to remove my name from the title. So, look like it's going to cost $$$ to close the refi.
We'll contact a real estate attorney to see if we can do so with a novation instead.
Thank you all once again.
Hi,
A real estate attorney will definitely give you detailed information about refinance and novation. All the best.
A real estate attorney will definitely give you detailed information about refinance and novation. All the best.