While the scenario you outlined may be feasible from a mortgage qualification standpoint, a cash-out refinance may not be permitted due to lender guidelines. If you refinance a mortgage and add a co-mortgagor to the new mortgage as well as the property title, that is usually considered a home purchase mortgage and not a refinance, even if one of the co-mortgagors was on the prior mortgage and owns the property. Lenders do not permit borrowers to take cash out with a home purchase mortgage. So you may be able to qualify for the refinance based on your combined debt-to-income ratio, credit score and other borrower qualification guidelines, but you may not be able to take cash out. You can use our Cash-Out Refinance Calculator to review what is feasible for your relative as a sole borrower and for both of you as co-borrowers, if a lender permits that scenario.
Your situation is somewhat unusual and in a bit of a gray area so I recommend that you contact multiple lenders to understand how they would handle your unique situation. You can review lenders in your area by clicking INTEREST RATES We advise you to contact at least four lenders as as qualification guidelines vary.