Whether you’ve decided to part ways with your romantic partner or your sibling has decided to buy a home of their own, you need to remove a name from a mortgage agreement. However, regardless of the reason, taking someone off a mortgage isn’t as easy as removing someone from an insurance policy; both people agreed to pay for a loan, and so to remove the name you’ll need to convince your lender that the remaining person can still afford the loan.
The good news is that there are ways to remove someone from a mortgage and you have a number of options for how you can move forward. Below, we’ll explain how you can remove someone’s name from a mortgage, the costs involved, and your options aftward.
How do you remove a name from a mortgage?
The first step is to contact your lender to let them know about your situation change and ask about your options. If you can afford the mortgage and other household expenses on your own, then you will need to provide proof of that and see if you can get a mortgage amendment, though in most cases, you’ll need to remortgage.
An amendment to the mortgage, often referred to as a novation or assumption, are not common. It will depend on your lender, circumstances, and type of mortgage as to whether they will allow you to assume the mortgage.
Does it cost anything to get a name removed from a mortgage?
Removing a name from a mortgage can be costly, depending on how the remaining homeowner decides to move forward. In the case of a mortgage amendment, there will likely be some closing fees to pay for the underwriting of the new agreement.
If you need to remortgage, then there will be all the usual costs associated with remortgaging, including a title search, appraisal fee, and initiation fee. The average cost of remortgaging is around 0.3% of the home’s value.
What can you do if the mortgage company will not remove someone’s name from a mortgage agreement?
If your mortgage company will not allow you to amend your mortgage by removing the person who no longer wants to own the home, you will need to remortgage. If you remortgage, you can either work with your current lender (if they are willing) or seek a new lender.
Regardless, you’ll need to provide them with your personal finance information, such as proof of income, tax returns, and bank statements to prove that you have the means to pay for the mortgage alone.
If that’s not possible, you can either:
- Get a new mortgage with another person as co-owner or co-signer
- Sell the home and use your half of the proceeds to purchase a new home
We’ll explore both of these options in the section “What are your options if the bank will not remortgage with one owner?” below.
Pros and Cons of Removing Someone from a Mortgage vs Remortgaging
If your lender will allow you to assume the mortgage, then you ought to consider whether or not it’s the right next step for you. In most cases, if your lender is willing to allow you to assume the mortgage, that means other lenders would be willing to lend to you too. If this is the case, it’s well worth exploring your options to make sure you’re getting a good deal. Here are the pros and cons:
Pros of Assuming a Mortgage
- Offers a more streamlined process since you are already with them
- May have lower fees than remortgaging
- You may be able to continue on with your current rate (good news if you currently have a good fixed-rate mortgage)
- They may not need quite as much information from you, since you are already with them and they know you are reliable
Cons of Assuming a Mortgage
- You have to supply the same financial information, so you may as well shop around for the best deal
- Your current mortgage may not be the most affordable or suitable for you alone
What are your options if the lender will not remortgage with one owner?
If your lender has refused to allow you to remortgage on your own, you can:
- Reach out to a mortgage broker to help you find a new mortgage
- Find a new co-owner/co-signer to own the home with you
- Sell the home
1. Reach out to a mortgage broker
If you know you can afford to pay your mortgage alone but your current lender won’t consider you, reach out to a mortgage broker. Mortgage brokers usually charge a flat fee, payable only if they secure you a mortgage, and can access a huge range of mortgage products.
They’ll know which lenders are likely to accept you and can help you find one worth applying to. Some mortgage brokers are paid by the lender, rather than you, but they are not allowed to be given any incentives by lenders that would make them biased toward one lender. If one mortgage broker can’t help you, ask a second before you rule this option out.
2. Find a new co-signer
If you cannot afford to keep the home alone, is there someone close to you who you would like to live with, and would be comfortable sharing your financial life with? Or, do you have a family member who would be willing to co-sign with you, and allow you to continue living in the home alone? Often, finding a friend, sibling, parent, or partner to share the home with you (either just financially or literally) is the easiest way to secure the mortgage, provided they have the means to secure a mortgage.
3. Sell the home
If you exhaust your options for refinancing the property, then it’s time to sell. While this isn’t often something you want to do, it is the only way to move forward if you cannot afford a mortgage alone and cannot find anyone you trust to part-own the property with you.
Selling the home will give you the proceeds to move on with your life. You can use the money to put down a deposit on a more affordable home, travel, start a business, go back to school, or put the money aside to save up for a future home purchase. Change is always scary, but this is an opportunity to start something new.
How to Sell Your House Fast in Massachusetts
If you find out you need to sell your home due to a relationship change with the person you share the mortgage with, you may want to sell quickly so you can start your new life elsewhere. While the real estate market can be unpredictable, selling to a cash buyer like us is not.
We buy homes in Massachusetts for cash, meaning we can close in as little as 2-3 weeks. All you need to do is contact us with some details about your home, and we’ll send you our best cash offer. If you accept, we’ll assess the property (we never do official home inspections) and give you our final offer. To learn more about the process or to get a cash offer for your home, click here.