How to Get Out of a Joint Mortgage
You might be wondering how to get out of a joint mortgage if your current situation has changed. Maybe you entered into a joint mortgage with your spouse or friend when things were better. Now the relationship might be beyond repair and you need out. While it is not the easiest thing to do, you can get out of a joint mortgage if you do it correctly. Here are a few things that you need to consider when trying to get out of a joint mortgage.
Settle on a Buyout
If you need to get out of a joint mortgage, you need to settle on a buyout amount with your other co-borrowers. You need to get out of the agreement, but you also should not have to give away all of the money that you have paid into the mortgage over the years. There are a few different ways to arrive at a figure, but the easiest way is to have the house appraised. Take the appraised value and subtract the loan balance from it. Divide the number that you get by the number of people in the agreement and that is approximately what you should be owed. The other person in the agreement needs to come up with that amount of money to give you in return for all of the money that you have paid into the loan.
Changing the Title
As it stands, you are both on the mortgage and you are also both on the title to the property. If you want out of the financial obligation of the loan, you will also have to give up your rights to the property. In order to do this quickly and easily, you will need to fill out a quitclaim deed. This is a very simple process that you can do at the local title company or with a lawyer. You will sign the document and it will relinquish any rights that you have to the property. You have now given up any rights that you had to the property in exchange for your buyout amount.
Refinance the Mortgage
The next thing that will have to happen is the refinancing of the existing mortgage. You will not directly be involved in the refinancing since the other party is taking on the loan themselves. However, you need to make sure that they do this step. If they do not come up with a new loan and keep the old one, your name is still on the mortgage. This means that you are still financially obligated to the property even though you gave up your rights to it. If the other person stops paying and the house goes into default it will hurt your credit just as much as it does the person still living in the house. Therefore, you will want to make sure that the other party in the joint mortgage refinances the loan in only their name.