3 Tips when Refinancing a Joint Mortgage

When you are in a joint mortgage sometimes it is necessary to refinance. Many different circumstances could necessitate the need for a refinance. When you do it, you'll want to make sure that you have done it correctly. There are a number of things that you will want to take into consideration when refinancing a joint mortgage. Here are a few tips to do it the right way.

1. Shop Around

When you are in the market to refinance, you are a hot commodity. Lenders need borrowers in order to stay in business. Therefore, they are willing to make the deal sweeter for you if you will give your business to them. The lending industry is very competitive and there are a number of things that they can do for you. By shopping around, you are sure to find the lowest rate and the lowest closing costs. If you just walk into the first lender you find and refinance with them, you might be missing out on a great deal somewhere else.

2. Assess Your Reasons for Refinancing

Many home owners tend to rush into refinancing, once they determine that it is the best thing to do. However, you should stop and think about what you are doing before you go through with it. If you are doing it just to get cash out, you need to assess if now is the best time to refinance. If you only need $20,000 it might not be in your best interest to refinance if the interest rate is higher than what you are paying now. Paying a higher mortgage payment for the next 30 years is not worth the little bit of cash that you can get out now. Look at the big picture before you get too far involved in the process.

3. Handle Deeds Properly

When you are in a joint mortgage, sometimes you will want to refinance the loan so that you can get one person out of the mortgage. When you have two people on the deed and the mortgage, you will have to refinance to get one person out of the picture.

In order to do this, you will need to do a quitclaim deed on the property. The person that is wanting out of the agreement has to sign a quitclaim deed that gives up their right to the property. Once they sign the quit claim deed, they have no rights to the property. However, until the property is refinanced with a new loan, they are still financially obligated to the property.

The party that is still remaining in the agreement has to get a new loan with only their name on it. Once this is all completed, the party with the loan now has all of the necessary rights to the house as well as the entire financial obligation. If you do not handle the deeds and the transaction properly, joint mortgages can cause you problems.