Please help me figure out how to get out of a home loan!

[jaxen112]

What is the name of your state (only U.S. law)? NY

I recently took on the role of co-borrower for my brother and his wife on an FHA home loan. They both make good money, however he did not qualify for any financing at the time. So they both pay for the monthly mortgage and I do not live in nor pay for the home.

We planned to refinance the home (at some point) to absolve my responsibilities, however I'm worried that he will still not have good enough credit for the bank.

Do I have any options??

Thanks in advance for any replies!

 

[Zigner]

What is the name of your state (only U.S. law)? NY

I recently took on the role of co-borrower for my brother and his wife on an FHA home loan. They both make good money, however he did not qualify for any financing at the time. So they both pay for the monthly mortgage and I do not live in nor pay for the home.

We planned to refinance the home (at some point) to absolve my responsibilities, however I'm worried that he will still not have good enough credit for the bank.

Do I have any options??

Thanks in advance for any replies!

Yes, the options are for them to refi to release you from your obligation. Or, you could pay the loan in full and become the mortgage holder if you'd like.

 

[jaxen112]

Thanks. A friend of mine told me about the FHA loan being assumable by another person, without refinancing the loan.

 

[FlyingRon]

Thanks. A friend of mine told me about the FHA loan being assumable by another person, without refinancing the loan.

The fact other loans are assumable means NOTHING to you unless your loan has such a provision. Yes FHA and VA loans typically mandate this provision. Most others DO NOT.
Even in the case of assumable loans, it's not automatic. The bank still has to approve the new borrower but the process often is cheaper than trying to obtain an outright refinance.

 

[HUD-1]

Your best bet is that they are income and credit qualified and refi to remove you from the loan. If they have trashed their credit in the meantime, or lost a job, you are out of luck. However, you knew this when you signed the loan docs. Here is some info on assumptions:

http://portal.hud.gov/hudportal/documents/huddoc?id=4155-1_7.pdf

Realistically though, who would agree to go on the loan via a credit qualifying assumption to get you off the loan?