Mortgage refinancing is tricky under the best of circumstances, let alone when you add in complications, like family financial entanglement. Mortgage expert Sean Cooper helps our reader Heather understand her options for getting out of a mortgage she took on with her family.
The question
I’m backed into a corner and not sure what to do. A few years ago, my siblings and I agreed to have our names added to my mom’s mortgage. Her finances had gone off the rails and she needed the help in order to keep the house.
Thanks,
Until now, it’s all worked out okay. Things have now changed. My husband and I are planning to buy a home of our own soon. Having another mortgage on our hands would undoubtedly affect this process. Since the mortgage renewal for my mom’s place is coming up, I’ve told my family that I want to remove my name from the mortgage and explained why. With the market the way it is and the fact that I make the most income out of all of us involved, they aren’t pleased with the news. So unpleased that things have taken a rather nasty turn, including threats of plummeting my credit and so on.
What do I do? They are refusing the idea of selling.
Can they actually affect my credit? What if they don’t refinance or sell?
Heather, J.
The answer
First things first: You’re not alone
Heather, your situation is more common than you think. Families often rally around each other during financial stress, and co-signing or joining a mortgage can feel like the right move at the time. When life shifts—like planning for your own home—what was a good idea can make things tricky.
Adding your name to a mortgage means you’re legally tied to that loan, whether you live in the house or not. That comes with big responsibilities, and yes—it impacts your credit score, your ability to qualify for another mortgage loan, and even your cash flow down the road.
The good news? You can find a way out, but it requires patience, strategy, and some tough conversations.
Can your family hurt your credit?
Let’s clear this up right away: your siblings can’t directly destroy your credit. Only late or missed mortgage payments would do that—and since your name is on the loan, the lender will report those late payments under your profile too.
That’s the real risk here. If your family doesn’t keep up with the monthly payments, your credit score will take a hit. When you’re about to apply for your own mortgage, lenders will look closely at your full debt picture—including your share of your mom’s house.
This is why it’s smart to act now, before the mortgage renewal date rolls around.
Why mortgage renewal is a turning point
When a mortgage term ends, you hit a fork in the road. The lender will offer new mortgage rates (usually based on current mortgage rates) and new conditions. This is the mortgage renewal.
At this stage, the lender reviews everyone on the loan. If you want your name removed, this is often the cleanest time to make it happen. Here’s the catch: your mom (and any siblings on the loan) will have to refinance the mortgage in just their names.
That means the lender will re-check their income, credit scores, and debt levels. If your income was what made the original approval possible, they may have a tough time qualifying without you.
Why your own mortgage dreams are at risk
Lenders in Canada use the mortgage stress test to check if you can afford payments if interest rates go up. When you already carry one mortgage, it reduces the room you have to take on another. Even if you’re not the one paying it, the bank counts it against you.
That’s why staying on your mom’s mortgage could block your path to buying your own home. It also limits your cash flow, since lenders see you as stretched thin—even if your day-to-day expenses don’t feel that way.
Your options to remove your name
Let’s look at the realistic routes:
Mortgage refinancing
The main way to remove your name is through mortgage refinancing. Your mom (and siblings, if they’re staying on) would apply for a new mortgage loan without you. If approved, the old mortgage closes, and you’re released.
This might involve paying closing costs, maybe a prepayment penalty, and possibly higher interest rates if her credit isn’t strong. This would get you off the hook.
Selling the home
Not popular in your family’s eyes, but selling is the cleanest solution. The mortgage gets paid out from the home value, and any leftover equity gets split. That wipes the slate for everyone.
If emotions are running high, remind your family that selling isn’t “giving up”—it’s about financial freedom. A house should support your life, not trap you in it.
Debt consolidation or HELOC
If your mom has decent home equity, another path might be using a HELOC (home equity line of credit) or a debt consolidation loan. By tapping equity, she could consolidate debt (like credit card debt) and strengthen her finances. That makes refinancing easier and less dependent on your income.
Professional help
This is where a good mortgage broker comes in. They can shop for a mortgage lender who’s willing to take your mom on solo, or with a co-signer other than you. Brokers can compare mortgage quotes, check adjustable rate mortgage options, or suggest a fixed rate that fits your mom’s budget.
What happens if they refuse?
If your family won’t refinance or sell, you’re stuck, at least for now. You can’t force a lender to take you off without their approval. Unfortunately, walking away isn’t an option, since you’re legally tied to the loan.
That being said, here’s what you can do:
- Keep records of all communication.
- Make sure payments are always made on time.
- Keep talking to the lender about your options.
If payments start slipping, you may need legal advice. Remember, protecting your credit score now will save you thousands later when applying for your own mortgage loan.
Building toward your own home
In the meantime, prepare for your own home purchase:
- Check your credit score regularly.
- Pay down credit cards and other debt to improve your debt-to-income ratio.
- Save for closing costs, insurance, and other hidden homeownership expenses.
- Compare fixed-rate vs. variable-rate options when shopping.
- Learn about the amortization period that best fits your future budget.
Final thoughts
Your family’s anger comes from fear. They know losing your income might make refinancing tough. You’re not selfish for wanting your own life. You’ve already helped, and now it’s time to step back.
Your credit isn’t something your siblings can wreck with words. What matters is whether the mortgage payments are made on time. Protecting your future means setting firm boundaries now, even if it’s uncomfortable.
The next steps? Push for refinancing at renewal, involve a mortgage broker, and remind everyone that the house is a financial asset, not a forever burden. One way or another, there’s a path to release your name and unlock the door to your own home.
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