Athen Apaquette

This post was updated on March 17th, 2019

Q:  When I bought my home, I couldn’t qualify on my own, so my brother co-signed for me. Now I want to remove him from the loan. What do I do?

A:  That’s a great question. Many people face this dilemma.

FHA will allow you to remove a co-signer because of their assumption clause. It requires that you contact your current servicer and apply for the loan all over again.

However, whether you’re able to remove your brother from the loan is up to the lender’s discretion.
Most lenders do not want to lose a guarantor; so unless you are strongly qualified, and your original co-signer was a non-occupant co-borrower, this will be an uphill battle. You may have to refinance to a new loan to get your co-signer/brother off the loan.

On the other hand, if you want to remove him from the title to the home or the “ownership papers,” that is simple enough and a smart move.

Anyone who owns the property places it at risk for liens. So unless you know your co-signers credit history, your home is vulnerable to his creditors.

Removing the co-signer from the title can be a delicate situation, (especially when there’s a relative involved), because while they are still responsible for the loan, they no-longer have ownership of the property.

Having (or being) a co-signer for a loan, financially binds you to them for years. My advice is to choose your co-signer carefully as they are entwined with the biggest asset you own.

Have more questions? Visit Homebuyer FAQ’s