Divorce and dissolution of a partnership are common reasons for removing a person’s title from a mortgage. Lenders, however, are reluctant to just get rid of a person’s title, thereby releasing him from liability to the mortgage. Lenders underwrite mortgages based on the charge and financing of all applicants, therefore releasing a borrower could potentially increase the creditor’s risk. An interest conveyance and equity buyout transfers curiosity and compensates the individual being eliminated from the mortgage, allowing the remaining individual to refinance as proprietor.
Transfer via quitclaim deed the interest or maintain ownership of the individual to be removed from the deed, known as the grantor, to the individual who will maintain the property, called the grantee. Buy a pre-printed quitclaim deed in the office supply store, draw up one yourself according to your state’s deed requirements or download one from an authorized website. Record the deed in the county recorder’s office to the county in which the property is located; you’ll have to pay a recording fee and complete every required property transfer types. Recording the deed isn’t a requirement for a valid deed in all states, but it does protect the grantee’s ownership rights should someone else claim ownership of their property. States generally recognize the grantee with the earliest recorded deed as the legitimate owner of a property when conflicting ownership claims arise.
Hire a real estate appraiser to determine the home’s value in the event the grantee will probably be paying the grantor for his interest. Deduct the mortgage balance due on the property from the property’s assessed value–when the appraised value is higher–to determine the amount of equity for which the grantee has to compensate the grantor. If the balance due is greater than the appraised value, the grantor will instead owe the grantee. No appraisal is necessary in the event the parties are not interested in reimbursement.
Apply for a new mortgage.