The Removal of a Co-Borrower From a Mortgage

When you take out a mortgage with the aid of a co-borrower, all financing decisions, from interest rates to qualifying loan amounts, are determined based on the financial status of both you and the co-borrower. Removing that co-borrower requires you to go through an entirely new qualification process. This process takes into consideration only your financial status as you secure enough funding to cover the balance for the existing mortgage. Known as refinancing, it’s the only method for removing a co-borrower, by essentially paying off the current loan with a new loan in your name alone.

File a quitclaim deed to remove the co-borrower from the title of the property before making the refinancing application. List both your name and the co-borrower’s name in the section marked “Grantor,” but list only your name in the section marked “Grantee” to remove the co-borrower from the deed. Both you and the co-signer should sign the new quitclaim deed before a notary public, and the notary will sign and date the deed to witness your signatures. Record the deed at the county records office in the same county where the property is located.

Find a lender willing to offer you a refinance loan. Check first with your current lender and present the information requested, such as current credit scores and financial data. The new loan relies only on your financial information, which must be sufficient to qualify without the co-borrower’s information included.

Fill out the loan application from the lender and return the application for processing. To qualify for most home loan refinancing, you’ll have to show a history of making on-time payments extending back at least a year, be creditworthy and have sufficient income to cover the expected payments. Pay any fees due with your application to cover processing fees, such as a new credit check.

Wait for the loan to be processed. Processing time varies depending on the loan type, but you can expect the shortest processing time with the Federal Housing Administration's streamlined refinancing loans. Sign the final refinancing papers to pay off the old loan and establish a new mortgage without the co-borrower’s involvement.