How To Remove A Co-signer From A Mortgage

In the lending markets of Michigan and Ohio, a co-signer is legally a "guarantor." This means the bank can come after you for the full balance of the loan if the primary borrower misses a single payment. Because this gives the bank a "safety net," they are notoriously reluctant to let you go.

In this video, a Michigan and Ohio attorney explains how to break the co-signer bond. We look at the four primary ways to achieve a legal release:

The Refinance: The most common path. The primary borrower applies for a brand-new loan in their name only, using the funds to pay off the old co-signed mortgage.

Mortgage Novation: A rare but powerful tool where the lender agrees to "swap" the old contract for a new one, removing the co-signer while keeping the original interest rate and terms.

Loan Assumption: Often found in FHA, VA, or USDA loans. This allows the primary borrower to "assume" full responsibility, legally releasing the co-signer.

Co-signer Release Clause: We explain why you must check your original Promissory Note. Some modern loans include a clause that allows for a release after 12–24 months of on-time payments.

We also clarify a major legal trap: the Quitclaim Deed. You’ll learn why signing a deed to remove your name from the "title" does nothing to remove your name from the "mortgage." In both Michigan and Ohio, you can lose your ownership rights while remaining 100% liable for the debt. Whether you are an ex-spouse or a parent trying to reclaim your credit, understanding the Release of Liability process is the only way to gain your financial freedom.

✅ In this video, a Michigan and Ohio attorney explains mortgage novation, refinance requirements, and the danger of quitclaim deeds without a release.

Disclaimer: This video is for educational purposes only and does not create an attorney-client relationship.

Among legal topics covered in this video:

Joint and Several Liability: Why the lender can sue the co-signer for the full debt before even talking to the primary borrower.

Mortgage Novation: The legal process of replacing an old contract with a new one to release a guarantor.

Loan Assumption Rules: Navigating the "Due-on-Sale" clause and finding out if your specific loan type allows for a transfer.

The Credit Impact: How being a co-signer affects your ability to get your own mortgage in Michigan or Ohio.

Indemnification Agreements: Using a private contract between the borrower and co-signer as a backup safety net.

DTI Ratios: Understanding how a co-signed loan "clogs" your borrowing power even if the payments are made on time.

Michigan & Ohio attorney David Soble and the Soble Law team are dedicated to the success of their clients in the areas of real estate, contracts, and financial disputes. As part of our commitment, we actively write, publish, and create books, articles, podcasts, slide presentations, and newsletters—all designed to simplify complicated legal concepts related to real estate and finance.

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