Second Mortgage

If you are in a  process to quit claim a house or still deciding on refinancing the second mortgage, then wait and analyze your situation first.

Suppose your partner wants to split up and s/he will be quit claiming the house to you. So in order to take your partner’s name off the second mortgage, should you re-finance it? 

What are the costs you have to pay for the quit claiming and the refinance?

You may not be abe to do this without refinancing the second mortgage. Yes, refinancing is really your only option!

The cost of your partner filing a quit claim is minimal. It is the cost of refinancing that will be a bit more significant - these are going to be mostly comprised of an appraisal, title fees, and escrow (or closing attorney) fees.

However, if you increase your total loan amount a little, you’ll be able to cover these costs with the new loan without having to pay for them out of pocket.

Moreover, the only big question for you is whether you can qualify to cover the payments for the new loan (paying off both existing loans plus closing costs) on your income alone. Because you probably qualified previously using both your incomes.

However, if the new monthly payment totals less a third of your gross monthly income, you shouldn’t have a problem

Quit claiming is relatively simple and inexpensive. In most cases, it will be advisable that your partner shouldn’t take the name from a title unless the mortgage was refinanced and your partner’s financial obligations were removed.

Why should your give away your ownership rights while remaining on the second mortgage? It really doesn’t make sense, but it is done all the time. Refinancing can be relatively inexpensive as well. It is advisible to meet with your current mortgage lender to discuss refinancing.

As mentioned above, you will need to refinance to get the loan in your name alone. Costs associated with a refinance vary depending what you hope to achieve through the refinance.

There are certain refinance options available that keep your closing costs to almost nothing and are offered on a case by case basis depending on what your goals for the property are.