I don't know anything about mortgages, but had a general (I think?) question...

If someone signs onto a mortgage after a few years, is that person stuck on the mortgage until it's paid off?

As in...can they choose to stop paying it before it's paid off?

Sometimes there is a penalty if you pay it off early, other times there is not. That is something to look at before you sign the mortgage.

No, I mean...

The mortgage is under someone's name, and then another person's name gets added on. Can that second person have their name taken off the mortgage without a penalty or any reason necessary?

If you're talking about being a guarantor, as someone providing assurance that the debt will be paid, then yes, I believe you could be released from that obligation. That assurance is very rarely called upon, as a bank will just foreclose on the property before they make an effort of getting another person to pay the debt.

If that's still not what you mean, maybe it would help to actually explain the whole situation (whether its yours or someone else's)?

Yes, this is the situation (trying to make it generic if I can):

Person A had a 25-year mortgage taken out a few years ago. They got this mortgage while working 2 jobs. They then got hurt, and can only work one job, raking in just above $20K/year. From the time the mortgage was taken until now, the payments were actually made by Person B, who was married to Person A. However, Person B cannot make those payments anymore, and Person A can't afford the payments. So, Person A wants to turn it into a 30-year mortgage now.

In order to help this happen, Person A wants Person C (my girlfriend) to sign on the mortgage, which will add to the income of the people "responsible" for the mortgage.

Again, I don't know how this works, but it threw up a red flag for me as a possibility of screwing up my girlfriend in the long run... as in, they'll be stuck on this mortgage for 30 years, and so when we end up buying a house... it'll be left up to me.

So, can my girlfriend get off of the mortgage at anytime?

So, can my girlfriend get off of the mortgage at anytime?

I wouldn't think so. Not without the consent & cooperation of the other two signees as well as the lender at least, or through an eventual re-fi which would essentially buy out the first loan & replace it with a new one (which your g/f doesn't sign onto).

The problem I see here is where you said "responsible" in quotation marks. Take those off there ... because if she signs it, she is responsible for it. Not "sort of", not "kind of but not really", but "is".

And it'd have to be one hell of a relationship before I would assume that responsibility for "Person A".

Frankly, this sounds like a situation where your g/f is likely to get royally screwed, and sooner rather than later would be my bet.

Frankly, this sounds like a situation where your g/f is likely to get royally screwed, and sooner rather than later would be my bet.

This about sums it up for me.

And I don't mean because person A and person B have any malicious intent. They may have all of the greatest intentions in the world, but as you've seen they've had trouble with this on the own in their past.

If someone isn't able to qualify for it on their own, then that means they can't afford it. So, all you're doing by signing on with them is signing up to be responsible for a mortgage that these other people cannot afford.

Agreed. Only way I would do this is for my mom. Even then, I'd know that we might take a hit. I can't imagine doing this for anyone other than very close family.

Agreed. Only way I would do this is for my mom. Even then, I'd know that we might take a hit. I can't imagine doing this for anyone other than very close family.

winner

I can't imagine doing this for anyone other than very close family.
Families can often be the worst offenders in situations like this.

'Neither a lender or a borrower be' - it's a cliché but it's damn good advice.

yeah, but you gotta do it for mom unless she is a leech.

Won't this count against her if and when you both try to get a mortgage?

She'll be on the clock for whatever payment person A is trying to make, thus making her net income look like less. Because of this, the amount she'll be able to qualify for will be drastically reduced.

Yeah, if she's signed on as a co-borrower, that prior debt will come up in any future credit check performed by a bank when you go for a mortgage. Not only will it kill you if it shows that she (but in truth, "they") has been delinquent, but like Craig said, that annual debt will be included in her total obligations along with credit cards, student loans, etc. So my suggestion would be:

http://www.dosima.org/rajan.khakhar/just_say_no_john.gif

Not just no, but hell no. And if she does it, cut the cord on her, as if you ever want to get married to her, you're getting fucked on this deal too.

But I don't know canadian law, so it could be different up there.

But I don't know canadian law, so it could be different up there.

it's my understanding that it would work exactly the same in this kind of things. You sign for it, you're responsible for it, and not with any "" around the word. And yeah, it would show up on any credit check and your credit rating will suffer if person A starts being late in making payments and such...

FM

If this thread can convince you and your girlfriend to stay the hell away from this, it might be the most helpful thread in the history of FOFC. Seriously.

Well, it does sound like a bad situation that should be avoided. But in reference to the question, I know someone going through a similar situation on the mortgage. If you want to take someone off a mortgage, you're essentially going to have to go through the paperwork again with the bank, which means it'll cost a bit -- probably around $1,500 give or take. But the loan will go on your girlfriend's credit and affect all her finances, including if this person makes late payments or falls behind -- that could royally screw her and you in turn.

I see no good that could come of this.

Even if A+B make payments on time and are perfect borrowers.. Your girlfriend is still going to be attached to a mortgage which, if you marry her, will make getting a house for the both of you more difficult.

Person A IS her mother... and Person B was her father, who passed away recently from cancer. No one knew until his passing, but only she was on the mortgage. And he was the one making the payments.

If this was anyone but her family, I'd think she was nuts for even considering it. But she knows nothing of how this works either. Her brother just told her that it seems like the only way to get the mortgage changed to 30-year is for her to sign on. She said she'd find out all of the details, but I thought she was a bit crazy for even listening to her brother about it (even if it was her mom that she'd be helping).

I just wanted to get some more information about what could happen to her/us if she does sign on. You guys have given some really nice reasoning to not do it (which I wanted anyway... I don't want her to sign on to this at all), so thanks to all of you!

First of all, sorry to hear about the situation.

But you already noted the big problem. If she signs on to it, its only for the purpose of getting the loan initially (to have the appropriate amount of income). How is your girlfriend's mother going to be able to cover the payments, even if she can get the refi? I don't know how much the mortgage would be for, but based on her income from the one job, I'm going to assume its no more than $200k, and hopefully its much less than that. Point being, even at the higher mortgage, the difference in payments between a 25 and 30 year mortgage is about $100 a month. Is her mother going to be able to afford $1100+, but not $1200+? Doesn't seem very likely. She's going to need some help from somewhere.

Edit to add: Is the brother in any sort of financial position where he would be able to help? And also...she's not crazy for trying to help. It's her mother we're talking about, and I'm gonna guess that her house is her only large asset. She needs to protect it.

Is selling the house and moving to more affordable housing an option?

Yeah, I realize it's her mom, and I don't know what I would do in that situation either. However, my girlfriend has over $15K in debt as well, and like you said already... this just seems like putting a small fire out while the whole forest is still blazing. And it could come back and bite both of us in the ass.

I don't believe the brother is in any financial situation to help, and neither is the sister. But I don't see how having a $15K debt means my girlfriend is in a position either.

Is selling the house and moving to more affordable housing an option?

I was going to bring this up with her as well. I know they don't want to move back into an appartment, but I don't know if they'd be opposed to looking for a more affordable home.

I was going to bring this up with her as well. I know they don't want to move back into an appartment, but I don't know if they'd be opposed to looking for a more affordable home.

That would probably be the best bet, especially if the house has appreciated. You said they've only been paying the mortgage for a few years, so chances are not much principal as been knocked off. You would hate to sell the house and take a loss once you factor in all the fees paid, along with the interest.

Also, with your girlfriend's debt, even though its manageable (hopefully its tied up in low, fixed debts like student loans), its still way too much for her to take on the debt that comes with a mortgage.

yeah, but you gotta do it for mom unless she is a leech.

Exactly. That is about the only person I can think of that I would do this for.

Yeah, I realize it's her mom, and I don't know what I would do in that situation either. However, my girlfriend has over $15K in debt as well, and like you said already... this just seems like putting a small fire out while the whole forest is still blazing. And it could come back and bite both of us in the ass.

I don't believe the brother is in any financial situation to help, and neither is the sister. But I don't see how having a $15K debt means my girlfriend is in a position either.


This has nightmare written all over it. I know it's her mom and I know she's trying to help, but where is the support structure here? If mom gets short on funds, who is going to bail her out? And if nobody is able to your GF is now stuck with a horrible credit rating. This just sounds like a no win situation.

who the heck would add their name to someone's mortgage - unless they're nuts!

if its your girlfriend or whatever you or she can help with the payments anytime - you can add her name or your name to the title (for ownership) but you need not ADD anyone's name to an existing mortgage

if you want to qualify for a new mortgage TOGETHER well then that's a different situation - you would benefit by qualifying for a larger loan amount by having two incomes (so long as you both have good credit)

If it's possible to just buy the house, and make the payments, and charge the folks rent, that would probably be the wisest move.

If it's possible to just buy the house, and make the payments, and charge the folks rent, that would probably be the wisest move.

Unless of course they stop making rent payments then you are faced with the task of kicking them out.

Unless of course they stop making rent payments then you are faced with the task of kicking them out.

It's a better problem to have, having to pay somebody's rent to yourself, as opposed to having to pay a mortage for somebody else for which you get zip. At least you have a house, that way.

Most of the advice given has been pretty good. Mom or not, if you co-sign for a re-finance you are now liable for the FULL payment. If anything derogatory occurs it goes on YOUR credit as well as the other person. As pointed out, 25 to 30 years will not change the payment that much. Chances are you are about to hose two peoples credit instead of just one. So, what benefit does it do to mess up 2 peoples credit and damage a relationship due to financial problems?

Sounds like you are better off just assisting the mom with payments as that will be your obligation under a joint mortgage anyway. If this is not a good option, then get housing that is affordable. Either sell the house or have your mother rent the house to someone else to retain it as an asset and then she can live in an apartment. Or if your girlfriend is serious enough about helping her mother to ruin her own credit, then she must be willing to let her mother move in with her as a better option at reducing costs.

I would 1. rent the house to someone else and 2. move mom in with me for a period of time it takes to get her back on her feet. If that does not work for your girlfriend due to social issues (not wanting her mom to live with her). Than advise her (mom) to sell the house she can no longer afford and stay out of it from there.

Thanks, I'll keep you all updated on what happens, in case some of you want to know how this ends.

Update...

Seems like my girlfriend won't have to sign on. She didn't really realize he risks until she heard some of the hings I said from this thread, so thanks guys! She also later told me that if her future would be in doubt, her mom wouldn't let her sign on either. Now they're working on being able to keep the house, and things are looking up on that end too. :)

good news - dodged a bullet there.

great news MikeVic, glad to hear it. :)

FM

I know that I am late to the party, but...

If it were easy to get off of a mortgage, then people would jump on them to have the poeple qualify, then jump off, all the time. But mortgage companies obviously don't like that, so they don't allow it.

who the heck would add their name to someone's mortgage - unless they're nuts!
If you are also added to the deed, it might not be so bad. Certain deed types even allow you to force the other parties to sell if you want to sell, or to give you your percentage of the property. If it is a $200k house, they want to mortgage it at $100k, and make you a one-third owner, you just made thirty-three thousand. If they start to go delinquent, you force a sale. Obviously it's not perfect, but could be a money maker.