Posted on: 13th Jul, 2007 07:25 pm
i have an fha loan. i am the primary borrower and my step-mom is the co-signer. i am married and at the time of getting the loan my wife was studying for the bar exam and was not yet employed, thus the need for a co-signer.
now my wife is employed. assuming she is credit worthy, how likely would a lender be to just allow my wife to assume the obligation of my step-mom on the mortgage (effectively a novation), and let us release my step-mom from liability. do you think this would be preferable to a refinance? from what i've read, it seems this process would avoid a lot of expense.
now my wife is employed. assuming she is credit worthy, how likely would a lender be to just allow my wife to assume the obligation of my step-mom on the mortgage (effectively a novation), and let us release my step-mom from liability. do you think this would be preferable to a refinance? from what i've read, it seems this process would avoid a lot of expense.
Welcome hog,
If your wife has the required financial ability and creditworthiness to take over the obligation of your step-mom on the mortgage, then the lender may allow her to do so. But in this case, the loan has to be refinanced thereby adding your wife on it as the cosigner.
If your wife has the required financial ability and creditworthiness to take over the obligation of your step-mom on the mortgage, then the lender may allow her to do so. But in this case, the loan has to be refinanced thereby adding your wife on it as the cosigner.
If assumption is allowed then it will be more preferable as the rate would remain the same. On the other hand if it would be required to refinance thne the rate will depend on the current values.
"Do you think this would be preferable to a refinance? From what I've read, it seems this process would avoid a lot of expense."
You are correct at that. Many of the expenses involved in refinance will not have to borne in case of assumption.
There would be a credit and income check before assumption is allowed. And property appraisal will not be required.
Niicss
You are correct at that. Many of the expenses involved in refinance will not have to borne in case of assumption.
There would be a credit and income check before assumption is allowed. And property appraisal will not be required.
Niicss