Bad Credit Mortgages Help

Many people have recently e-mailed me and asked me about how to refinance a mortgage if they are on the mortgage with someone else and how their bad credit will effect the process.  This an extremely valid question as most people today have a mortgage that has a co-signor on it, such as a husband and wife who own a home.  Unless the mortgage is solely in your name, the other person has just as much say legally to say yes or no to a mortgage changing decision.

If you have a mortgage that has shared ownership, the best thing to do to understand what options you have available to both of you if you have bad credit.  Most of the time i get asked this question when people who own a home get divorced from their spouse and the court records require that the mortgage be put in one or the others person’s name.  Well the only way to legally do this is to refinance the mortgage in the one person’s name and take the other person off.  The problems that people run into is that the person that wants the house and whos name the mortgage needs to be in, cannot qualify for the refinance because they either don’t make enough money or have bad credit.  What can be done with this type of shared ownership situation?

Well i am not going to lie and say this situation is easy, but there are some solutions that may take some time, but this kind of situation can be resolved. The first thing to understand is that whoever is going to take the loan must qualify for it without the person who is being taken off.  So if the husband is taking the house and if he can’t qualify on his own, he will need a friend or family member to co-sign with him in order to get the house out of the wife’s name.  In turn the wife will have to sign a quick claim deed to be removed from the title of the home when the new refinance loan closes for the husband.

Having good credit is the key here and if you don’t have it, you will have to either get a family member who does who is willing to co-sign, or if there is no way to re-finance the loan in someones name, then your decision has been made easy.  You will have to sell the house.