Discover some ways to remove someone from your mortgage without going through a refinance.
While a mortgage refinance is one option, you can remove someone from your mortgage without going through that lengthy process. A loan assumption or modification works just as well while saving you time and money.
When you have a mortgage with good terms but need to change who is named, you might search for answers to remove someone from a mortgage without refinancing. The great news is, you have options, though the best option will vary based on your unique circumstances. Learn how to work with your lender to change the individuals named on your mortgage.
Why Remove Someone’s Name From a Mortgage?
Ryan Dossey, co-founder of Sold Fast, a company that makes cash offers for homes, outlines why homeowners modify their mortgages and remove someone’s name from them.
“People tend to remove themselves from mortgages when relationships or financial needs change,” Dossey explains. “When couples split up, the property either gets sold or one party keeps it and the other party wants off the loan. It's also not uncommon to see parents help their kids get mortgages but then need the debt off their credit later to maintain their own bankability.”
Some people remove a partner’s name to have a fresh start. Young adults may also want to remove their parents from the picture if they have good credit and previously needed their parents as cosigners.
Can You Remove Someone’s Name From a Mortgage Without Refinancing?
There are many scenarios in which people look to remove another individual from a mortgage, including divorce or a co-signer wanting to be removed once you have established your credit. Depending on your loan’s terms and rates, refinancing might be unattractive. You might have a higher rate and spend more over the loan term.
Homeowners and cosigners can remove their names from mortgage agreements without refinancing or increasing the loan amount.
You’ll start by reviewing your options, which will vary based on your circumstances, such as whether one of the named individuals wants to assume the loan.
Then, you’ll talk to your lender to see what they offer regarding changing the names on a loan. You’ll need the lender to agree to the terms you request.
Although you aren’t refinancing, there will still be ample paperwork involved. You’ll need to complete this paperwork to modify the loan and ensure the other party is no longer named on insurance or taxes for a smooth process.
Five Ways to Remove Someone From a Mortgage Without Refinancing
Learn your options for adjusting your mortgage to remove another individual from it. Here are five ways to complete this process.
1. Secure Approval From the Lender
Your lender can remove a name from a mortgage without refinancing. The hard part is that it’s completely up to the lender to decide whether to allow this. The challenge is that lenders are not motivated to offer loan modifications because fewer people listed on a loan mean fewer parties to pursue for repayment if something goes wrong.
An advantage to this option is that it is fast and simple if your lender approves it. A disadvantage is that you’ll still be scrutinized financially to see whether you can assume the loan yourself and have the necessary income to do so.
Most people choose this option when they have completed a divorce and have a divorce decree showing the division of property. The lender knows there is no way they’ll keep both parties on the loan, but you’ll still have to go through financial reviews.
2. Modify the Loan
Some lenders are willing to change the mortgage loan terms without a refinance. The most common use cases for loan modifications are changing interest rates or extending the repayment period, both of which can make the loan more affordable.
But to qualify for these modifications, you often have to prove a financial hardship. Some lenders might consider a divorce or legal separation as a financial hardship. Just talk to your mortgage lender to see if this is an option.
The advantage is that this process is simple, but the disadvantage is that it is not widely available and is up to the lender's discretion.
3. Assume the Mortgage
Certain home sales allow for assuming a mortgage with the existing loan terms. This can release one person from the loan, allowing the other to own the home.
The advantage of this is that it is a fairly clear process. The disadvantage is that most conventional mortgages have a clause stating that they do not allow for a mortgage assumption. The lender can demand the full remaining balance if a home is sold.
Individuals with a government loan and rare conventional loans that are assumable are ideal for this option when removing someone from a mortgage.
4. Declare Bankruptcy
If one individual named on the mortgage files for bankruptcy and gets their debts discharged, you can simply assume the home without going through a refinance.
The advantage is that the bankruptcy event will provide an ideal opportunity to adjust the names on the mortgage. The disadvantage is that these scenarios are rare and if you are still married to the co-borrower when they file for bankruptcy, the house is considered collateral that the bank can assume and sell as part of the bankruptcy filing.
This option is ideal for someone with a co-borrower they are not currently married to who is considering declaring bankruptcy to help them overcome dire financial strains.
5. Sell the Property
In some scenarios, neither party listed on a loan might want the home. If that’s the case, the best option is to sell it.
The benefit of doing so is that the parties can split the proceeds from the sale and be released from all liability and financial obligations related to the home. This is also a seamless way to ensure that neither party owns the home.
A major disadvantage of this option is when the mortgage is greater than the home's value. This happens when a home depreciates or you’ve taken multiple loans out on the house or failed to do upkeep, making it worth less.
What Happens When You Remove Someone From a Mortgage Without Refinancing?
Before removing someone from your mortgage, understand how the dynamic changes between you and the individual being removed.
Here’s what happens to the person remaining on the mortgage:
- Payment burden: The remaining person on the mortgage must make the full payment independently. That also means you’ll need qualifying income to get approved for the full mortgage amount. If that’s not realistic for you, it might be better to downsize than to try and remove the other person from the mortgage.
- Liability: Now you’re the only person with liability for the mortgage. If you fail to make a payment or default on the loan, it could have devastating consequences for your finances.
- You might not have sole ownership rights: Just because you remove someone from the mortgage doesn’t mean they no longer own the property. The deed will still have the other person named until you complete a quitclaim deed.
These are some of the changes for the person being removed from the mortgage:
- No more loan obligations: Regardless of what happens to the loan next, the removed individual will have no obligations related to the loan. That means if the other party misses a payment or is late, it will not impact the removed individual.
- New debt-to-income ratio: The person removed will now have a lower debt-to-income ratio, which means they could qualify for new loans more easily or see an increase in their credit score.
- Maintain homeownership: Just because the individual is no longer named on the loan, they might retain ownership of the home. While that might sound great, it could become a problem depending on how the other party cares for and uses the home.
Why You Should Reconsider Refinancing
In most scenarios, a refinance is the best way to remove a person’s name from a mortgage. Most lenders only allow for removing another person through a refinance. To qualify, you’ll need to have sufficient equity in the home, have good enough credit to assume the loan on your own, and prove you have the income necessary to pay for the home.
When you complete a refinance, you set up a new mortgage, which the lender uses to pay off the existing mortgage.
Refinance Requirements
Learn what you’ll need to qualify for a mortgage loan refinance.
- The new loan amount should be 80% or less of the home’s total value
- The borrower should have a credit score of 620 or higher for a conventional loan or 580 or higher for an FHA loan
- Your debt-to-income ratio should be lower than 45%
- You have a steady income, which can come from employment, alimony, child support, Social Security, etc.
Mortgage Refinance Pros and Cons
No matter your reason for removing the other person from the loan, you should be aware of the pros and cons of refinancing the mortgage.
Pros
- Option to shorten the loan term: If you’ve paid a great deal of the loan, you could now get a 20-, 15- or even 10-year loan term. This will allow you to pay off the mortgage faster and often get a lower interest rate than you would with a 30-year plan.
- Extend the loan term: When you need a lower mortgage payment, assuming another 30-year loan might make the most sense. That’s because it extends the term and lets you spread out payments for longer, freeing up some space in your budget.
- Reduce the loan’s rate: Depending on when you took out the mortgage originally, you might be able to secure better rates today, which could help lower your monthly payments.
- Do away with mortgage insurance: If you didn’t have 20% to put down on the home at the time of purchasing, you might have been required to purchase mortgage insurance. Depending on the home’s value today and how much equity you’ve built in it, you might be able to stop paying for PMI.
- Funds to buy out the other party: If you remove someone from the loan because they will no longer live there, you can refinance the loan with a cash-out refinance to buy out the other party without paying the funds from your bank account.
Cons
- Loan qualification: When you take over the mortgage by yourself, you must qualify for the loan. This can be challenging depending on your income and credit score.
- Closing costs: You’ll need several thousand dollars in closing costs to complete the loan. This includes origination fees, appraisal fees and other costs. Depending on your loan’s value, it could cost upward of $10,000.
- Interest rate increase: Depending on when you got your mortgage, a mortgage loan refinance could mean you pay more interest. Now may not be a good time to refinance, as Dossey explains: “The biggest reason to avoid refinancing right now is rates, which are in the high 6s. According to data from the Federal Reserve Bank of St. Louis, you're better off financially removing someone than refinancing if you bought any time prior to 2002.”
Keep the Same Mortgage While Making Some Changes
Ultimately, adjusting your loan in some way without a refinance to remove another person is ideal, as long as your lender is willing to do so. But if not, you could still get agreeable terms with a refinance and have the option to do a cash-out refinance to buy out the other party with greater ease.
Why You Should Trust Us
Benzinga has guided readers on their financial journeys for over 15 years. The expert in the article, Ryan Dossey, cofounder of Sold Fast, knows the nuances of getting a refinance.
Additionally, I’m a Certified Personal Finance Counselor (CPFC) and have been a writer for Benzinga since 2021. I have also contributed to other finance publications, such as U.S. News & World Report, Business Insider and Newsweek.
Frequently Asked Questions
How difficult is it to remove someone from a mortgage?
While removing someone from a mortgage is difficult, the process can be worth it if you have a great rate and your lender is willing to work with you.
Can I remove my ex-wife from a mortgage without refinancing?
You might be able to complete a mortgage assumption to remove your ex-wife from your mortgage without refinancing. But a refinance could help you take some of the equity from the home to buy out your ex-wife if needed.
How do I get out of a mortgage with a co-owner?
If you want to retain ownership of the property, you can refinance the loan solely in your name or request that the lender remove the other person from the existing loan.
Sources
Dossey, Ryan. Personal interview with the author. 16 Jan. 2025.
CFPB. Understanding the different kinds of loans available. Consumer Financial PRotection Bureau. https://www.consumerfinance.gov/owning-a-home/explore/understand-the-different-kinds-of-loans-available/
HUD. Let FHA Loans Help You. U.S. Department of Housing and Urban Development. https://www.hud.gov/buying/loans
FRED. 30-Year Fixed Rate Mortgage Average in the United States. Federal Reserve Bank of St. Louis. https://fred.stlouisfed.org/series/MORTGAGE30US
About Marc Guberti
Marc Guberti is an investing writer passionate about helping people learn more about money management, investing and finance. He has more than 10 years of writing experience focused on finance and digital marketing. His work has been published in U.S. News & World Report, USA Today, InvestorPlace and other publications.