Refinancing your home can be an excellent way to lower your monthly mortgage payments, access equity, or adjust your loan terms. But what if you’re not currently listed on the loan but want to refinance the property? You ask who can refinance? This situation can be a bit tricky, but at North Star Mortgage Network, we’re here to clarify your options for refinancing when you’re not on the loan.

Can Someone Not on the Loan Refinance a Home?

Yes, you can refinance a home even if you’re not currently on the mortgage! Whether you want to remove a borrower or add a new one, refinancing may still be an option depending on your circumstances. There are a few key rules to understand, particularly when it comes to rate and term refinances and cash-out refinances.

Rate & Term Refinances: Adding a Spouse to the Loan

One common scenario is when a mortgage is in the wife’s name only, and she’s the sole person on the title. However, the wife may need to be removed from the loan for any number of reasons, and the couple wants to refinance in the husband’s name. Here’s how you can handle this:

• Adding a Spouse to Title: If the husband was not previously on the loan, he can be added to the title before the refinance application is made. According to Fannie Mae’s recent changes, the person being added to the title must be on it before applying for the refinance (not just before closing).
• Refinancing in the Husband’s Name: Once the husband is added to the title, you can proceed with refinancing the mortgage in his name. The property will remain owned by both spouses, but the loan itself will only be in the husband’s name, assuming all eligibility requirements are met.
• Why Not Sell the Property to the Spouse?: Technically, the wife could sell the property to the husband and complete a rate and term refinance that way. While it’s possible, it’s not recommended by lenders, as it may be viewed as a workaround to avoid cash-out refinance requirements.

If both spouses are on title but only one is on the mortgage, the person not on the loan can still be added to the mortgage through a rate and term refinance, which is a relatively simple process.

FHA Rate & Term Refinancing: The Same Rules Apply

The process for FHA rate and term refinancing is very similar to conventional loans. If only one borrower is on the existing mortgage, you can still proceed with the refinance in the person’s name who is not on the original loan—just ensure that the person you’re adding to the title is on it before the application.

Cash-Out Refinances: Different Rules for Conventional and FHA Loans

While refinancing when not on the loan is possible for rate and term refinances, cash-out refinances have additional seasoning requirements.

Conventional Cash-Out Refinance (Fannie Mae)

• Title Seasoning: For a cash-out refinance, the person being added to the loan must have been on the title for at least 6 months before applying. This is a critical requirement.
• Mortgage Seasoning: The property must have had an existing mortgage for at least 12 months to be eligible for a cash-out refinance. If the property is free and clear (without an existing mortgage), then the seasoning requirement drops to 6 months.
• Manufactured Homes: If the property is a manufactured home, the seasoning requirement extends to 12 months, regardless of whether there is a mortgage.

FHA Cash-Out Refinance

For FHA loans, the seasoning requirements are slightly different:

• Ownership and Occupancy: For a cash-out refinance, the person must have owned and occupied the property for at least 12 months. However, there’s no requirement for the person to be listed on the original mortgage.
• No Need to Be an Existing Borrower: As long as the person owns and occupies the home for the required period, they can be added to the mortgage for a cash-out refinance.

Key Takeaways: Refinancing When Not on the Loan

Here’s a quick recap of what you need to know if you’re not currently listed on the mortgage but want to refinance:

1. Rate & Term Refinances: You can refinance the loan even if you’re not listed on the original mortgage. Ensure that you’re added to the title before applying for the loan.
2. FHA Loans: The same rules apply to FHA refinances as conventional loans for rate and term refinances.
3. Cash-Out Refinances: For conventional loans, you must be on the title for 6 months to qualify for a cash-out refinance, and there are additional requirements for manufactured homes. For FHA loans, you need to have owned and occupied the property for 12 months, but you don’t need to be on the original mortgage.

Need Help Refinancing? Contact North Star Mortgage Network Today!

At North Star Mortgage Network, we specialize in helping homeowners navigate complex refinancing options. Whether you’re looking to lower your mortgage rate or access cash from your home’s equity, we’re here to help you every step of the way.

If you’re ready to refinance or just want to understand your options, contact us today to schedule a consultation. Let us help you find the best solution for your unique needs.