Remove brother from loan and property deed
I've taken a house on loan jointly with my father and my elder brother. My brother is the main applicant in loan and the property deed is in the name of all. Now, my brother is not living with us and he is not paying the home loan installment. Actually he never paid any money. Could you please give me advice, how to remove my brother from loan and property deed. and how much cost will occur on that?
Removing a name from a joint loan is difficult because joint loans are usually taken to increase the loan amount. "If the applicants decide to part ways, the basic purpose of joint borrowing is hit. So, lenders are generally reluctant to convert joint loans into single-borrower loans. If the bank had sanctioned the loan solely on the basis of the principal borrower's income, it would be easier for it to take a call and remove the other name from the agreement. But even in such cases, banks conduct due diligence by reassessing the creditworthiness of the person to whom the loan will be transferred.
In your case the principal borrower is your brother, so loan it is possible the bank has sanctioned the loan solely on the basis of your brother income. If income was considered while deciding the loan eligibility, the bank will be unwilling to execute the change unless you get a new co-borrower on board so that your loan eligibility remains the same.
The bank will consider the new proposition for repayment and may agree only if all its settlement criteria are met.
A better way to do this is to shift your loan to another bank. "Administratively, shifting your account to a new bank is more convenient. You can present it as a fresh case where the property belongs to a single owner and share your financial credentials. If there is nothing wrong with the case, the bank will be more than happy to get new business.
Another option is to clear your debts. The bank is not interested in the asset's ownership and will expect repayment from both the parties. Hence, both can sell the asset to repay the loan. Ensure that the co-borrowed loan is against a co-owned property as the sale proceeds will go the person in whose name the property is registered. If not, get the ownership changed. Alternatively, one of you can take an additional loan, buy out your brother share and transfer the asset in your name.
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