A co-signer is required when a mortgage candidate cannot demonstrate sufficient funds or has a poor credit score, such that if the other party fails to pay, as a co-signer, you assume the payment of the mortgage. However, with time you may want to remove your name from the mortgage, which oftentimes may be difficult to achieve, but there are still a few choices available.
One of these possibilities is to see if the other party now qualifies based on his income and credit history and if he qualifies, the lender may be willing to remove you as a co-signer and restructure the loan if you don’t qualify.
The Mortgage Lender should be contacted
Seek clarification over a refinance in the name of the primary client only with the creditor who currently owns the mortgage. The applicant’s income and credit score can be re-evaluated, as well as their payment history, by the lender, after which a prequalification letter will be issued if the applicant now qualifies for the mortgage on their own.
File a quitclaim deed
A quitclaim deed is a type of deed that allows you to sell your property without having to. You could file a quitclaim deed once you’ve determined that the applicant can refinance the loan in his or her name.
This deed is a legal document that disclaims your ownership of the property. You can create one by yourself or utilize a free template from a website, with a description of the property, its address, the transfer date, and the payment, all included in the deed.
Although there is no exchange of money, in this case, you must declare this on the deed and the deed must then be signed by all parties in front of a notary.
Present the lender with the quitclaim deed
Send the quitclaim deed to the lender through the mail, fax, or email so that the refinance can be completed.
Also, the lender will require vital documents such as pay stubs, tax records, proof of savings, and proof of assets at this point, after which you’ll be formally removed as a co-signer of the mortgage once the information has been validated and the refinance has been completed.
Explore additional options
It is feasible to look around and locate another lender prepared to authorize a refinance if your present mortgage lender refuses to go ahead with the refinance.
Also, there’s the alternative of repaying the loan if the person has the cash or a family member who is prepared to offer them the money. Otherwise, the only option to get your name off the mortgage as a co-signer is to sell the property and pay off the loan with the funds raised.