What is the easiest way to remove myself from a mortgage and deed on a house that I purchased with a friend?
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What is the easiest way to remove myself from a mortgage and deed on a house that I purchased with a friend?
I do not reside there but remain on the note and deed. We dated for 4 years before splitting. We agreed to her paying back half of my out of pocket costs to buy it if I would let her and her 2 adult children live there. She’s been making mortgage payments for the last year. I want to avoid a legal battle but think she cannot refi in her name only. I’m ready to look at buying a home for myself but need to be removed from the loan in order to do so.
Asked on September 17, 2019 under Real Estate Law, North Carolina
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 4 years ago | Contributor
You cannot just ask to be taken off of a mortage. The fact is that the lender made the loan based on the both of your being finacially obligated for its repayment. Accordingly, by relaesing you from the mortgage, the lender reduces the number of people who it can look to for payment or sue in the event of nonpayment. Therefore, typicaly, your only recourse would be to have the other party refinance the loan solely in their name. That having been said, if your ex cannot re-finance, they can ask the lender to allow what is called a "novation" to remove your name. While this is only rarely allowed, it's still worth trying. A novation could be accomplished if your ex can prove that they have paid the mortgage without you. If they are current and have never been late with payments, the lender may allow them to remove your name from the mortgage. A lender may also allow a novation if your ex "buys" your release by making a substantial payment to reduce the principal mortgage balance.
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 4 years ago | Contributor
You can't be removed from the mortgage without the mortgage being paid off (such as by being refinanced): the mortgage is a contract among you, your friend, and the lender, and the consent of ALL parties to it is necessary to change it--including to remove one of the parties from it. The lender has no reason to agree to let you off the loan, since doing so hurts it by reducing the number of people responsible to pay the loan, and whom it can potentially sue if the loan is not paid. Therefore, the bank will not let you off the loan without it being repaid or refinanced, even if your friend might agree to release you.
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