Refinancing

• Refinancing is one of the easiest ways to change the name on a mortgage. Most people think of a refinance as a way to update an old mortgage, re-creating it in a new version that may allow them to borrow more money or find a better rate. This is true, but a refinance actually creates an entirely new loan that pays off the old mortgage entirely. With creation of the new loan, the borrower has an opportunity to assign entirely new names to the mortgage.
  
  

Changing Name

• Since refinancing procedures are rote and lenders process many refinances, the lender may not even ask if the borrower wants to change the name on the mortgage. This occurs when the borrower works with the same lender that created the original mortgage, allowing the lender to substitute information from the old application to the new one. The borrower must be very clear from the beginning that one purpose in refinancing is to change the names on the mortgage itself so the lender can prepare the appropriate documents.
  
  

Refinancing Purpose

• People refinance to change the name on a mortgage for many reasons. A borrower may at first need a cosigner to qualify for the loan, but may then be able to successfully acquire a new loan and omit the cosigned names. Divorces often result in a refinance that leaves the house in only one spouse's name, the other spouse taking some of the cash as partial equity in the house. Refinancing may also help adjust credit for two spouses intent on acquiring future loans.
  
  

Novation and Selling

• If people want to change the name on a mortgage because of divorce or other legal obligation, the other primary two choices are novation and selling the property. Novation is a more direct form of refinancing in which a new debt replaces the old debt. If the remaining debtor is in a strong financial position, the lender may agree to take one of the names off the mortgage. Selling the property ends the mortgage and removes both names from the account, which the lender then closes.