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My colleague wanted to sell her house because the prices were skyrocketing. The co-signer on her mortgage claims 25%. Can she sell without his permission?

Dear Quentin,

My colleague spent several months ago preparing her house for sale. She currently lives with other family members due to high house prices in our area, but this also gives her a great opportunity to sell. (We live in the Denver metro area.)

House prices have risen dramatically since buying the house, so her family wanted to sell the house and divide it with other family members, she moved in temporarily with her parents to save a larger amount of money to buy a house and other family members. Other costs.

Yesterday, she mentioned that she has a mortgage contractor who has a distant relative and has never lived in the home. This person has never contributed anything financially to a mortgage or home purchase. They need this individual’s signature to sell the house.

When asked, this person asks for 25% of the profits from the sale of the house, and tells her that she is lucky he doesn’t ask for 50%! It seems that this person is not getting anything, but since he is the co-signer for the loan, my friend is in a difficult situation.

Is there any way she can sell the house, or ask this distant relative to mortgage her so she can sell the house?

Colleagues are interested

Dear CC,

This is a cautionary tale. If you have to buy a home with someone or have a co-signer help you qualify for a mortgage because your salary or credit rating doesn’t meet the bank’s requirement, don’t jump in first to ask for help. .

Even if it’s someone you know well, ask yourself if they have other reasons to volunteer. If it is a distant relative, that must be even more cautious. Why would he agree if he barely knew your co-worker? He showed his colors. He wants a slice of cake!

It works both ways: If you are a co-signer, you are responsible for the loan if the principal applicant and / or deed holder fails to pay the mortgage. In this case, your colleague should make sure that this relative is the co-signer and not the deed holder in the home.

If he is just a co-signer, he is actually the guarantor and also the person responsible for the loan if your co-worker does not pay. He couldn’t object to her selling the house. He may be confused in the leverage he holds, or your colleague has mistaken a co-owner for a co-owner.

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A mortgage may include co-signer release, under which your friend can release the co-signer after a certain period of time and / or other conditions have been met. It could be two years of on time payments and her credit score going up.

Also, ask your lender or refinance. The second option is often the most convenient option for people in this situation, but your friend may not want or be able to do this with the time of sale and the costs associated with refinancing in one. short time.

Your colleague is not buying this house alone, and she cannot sell it alone. She needs to seek the advice of a real estate attorney to sort the paperwork, get in touch with the lender and figure out the best way for the future. Only then can she make an informed decision.

First and foremost, should she know this person’s status: co-sign, or co-sign and co-owner? If the person is old, she may decide to give her distant relative a monetary gift of thanks, with the advice of the real estate attorney.

With his request as a co-signer, I will not gold-plated any lilies anytime soon.

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