We get a lot of questions about how to remove someone from a mortgage and/or deed, and if it's possible to do so without refinancing or selling your home. First, let’s go over the difference between your liability on a mortgage vs. your liability on a deed.
When you finance your home mortgage jointly with another person, the lender is accounting for both of your assets, liabilities, and income. Your risk as borrowers is also looked at jointly, and your future liability on the home loan is equal. If, at some point, you want to remove one person from the mortgage loan (this commonly happens in divorce or breakup situations), the other person would have to re-qualify for the loan separately. In order to do this, you would have to either refinance (change the terms of your mortgage loan, including who is liable to pay the loan back), or sell your home and remove both parties’ liability to pay the loan back.
(Scroll down for how to remove a name from a deed)
A deed, on the other hand, is vastly different from a mortgage. A deed is not a loan liability, but rather proof of ownership and legal right to property. To remove someone from a deed, there are two ways to do this (other than refinancing or selling your home): by mutual agreement, or by legal recourse. If either of these scenarios applies, then you can remove someone from a deed by going through a title company and re-recording the deed with the county in one party’s name.
Keep in mind, however, that removing someone from a deed will not remove that person’s liability to pay the mortgage back if that person is also on the loan. If the person being removed from the deed is not on the loan, then it would make sense to remove that party from the deed as well. However, if that person is also on the mortgage loan, it would not make sense to remove that party from the deed alone, as it does not remove the liability of paying the loan back; the loan liability would remain, but the person removed from the deed would no longer have a legal right to the property.
So, in short, you can remove someone from a deed if all parties agree, or if it’s been legally mandated, without refinancing your mortgage or selling your home. However, you cannot remove someone from a mortgage loan without refinancing or selling.
Have more questions? Contact us! We're always happy to help you fully understand your options.