The following question came into my office, and I thought this might affect many of you who want to be a friend ... indeed.
Question: I co-signed on a mortgage for a friend. How can I take my name out of the loan?
Question Detail: One of my friends asked me to cosign a mortgage for him. Is there a way that I can take the name out easily from the loan besides refinancing in the future? Will my name be on the deed as well as the loan? Are there any other liabilities that I need to watch out for? Under what condition can I remove my name out of the mortgage without any consequences and how soon? Thank you very much for you professional and legal advice.
My Answer:
It may not be easy to remove your name from the mortgage. The lender who made the loan did so based on you signing and agreeing to guarantee payments. If your friend has consistently made all payments on time, then the lender may consider removing the guarantor (you) from the loan agreement, but unless there is some clause in the mortgage agreement stating otherwise, the bank is under no obligation to remove you as guarantor, and especially in today's uncertain economic times, there is little incentive for the bank to release you as a guarantor on the loan. Even so, it doesn't hurt to ask. A refinance may be an option, but both your friend and the lender, or a new lender, would have to agree to this.
Just because you are a guarantor on the mortgage does not mean you are on the title to the home. To find out if you are on the title, you must check the deed records in the county where the property is located.
You should not be responsible for any other liabilities except those that you agreed to as a guarantor on the loan. To be sure what liabilities you agreed to, you will need to review the loan agreement you signed. However, especially if your friend stops making mortgage payments, tax payments, utility payments, etc., some creditors may start calling you just to see if they can get you to agree to pay. Just because you are not required to pay doesn't mean they might not try to get you to pay.
As with any situation involving a written agreement, your rights and obligations depend on the written agreement you signed, and the above is intended only as general advice. For specific advice you should consult directly with an attorney.
Disclaimer: The above is intended as general information and your specific situation may be different so it is always important to speak with a lawyer about your specific situation.
For further information, visit our website at:
