Does a Cosigner Need to Be on the Title of a House?
- Oftentimes, married couples both sign a mortgage when purchasing a home together. Sometimes, single individuals need the assistance of family member to obtain a mortgage loan. When a cosigner is on the mortgage, his name is automatically on the title. Cosigners thus have an interest in the mortgaged property. It's important to note that there is no difference between a cosigner and a co-borrower; both guarantee the mortgage loan.
- Once way to remove a cosigner from a title is to refinance. A cosigner's name is only on the title because cosigners guarantee mortgage loans and are responsible in the event of default. Refinancing removes the cosigner's name from the title because the primary borrower is solely guaranteeing the loan. The difficulty, however, is convincing a lender to agree to refinance. Usually, the primary borrower doesn't have a high enough credit score to refinance, otherwise there wouldn't have been a need for a cosigner in the first place. However, if the primary borrower has an good enough credit score, refinancing is likely possible.
- Using a quitclaim deed is a relatively uncomplicated way to remove a cosigner from a home title. Although the cosigner's name is automatically placed on the title when purchasing a home, the cosigner's name can be removed right after purchase by executing one of these deeds. The cosigner simply uses the quitclaim deed to convey his interest to the primary borrower. Quitclaim deeds are commonly used during divorce or during marriage when one spouse wants to convey interest in real property to the other spouse.
- Executing a quitclaim deed is easier than refinancing. However, quitclaim deeds require cosigners to want to release their interests in the property. Regardless, if a quitclaim deed is used to remove the cosigner's name from the title, the deed should be recorded at a county recorder's office so that there's no question as to who is the sole owner of the property in question.
