A documented agreement
Your signed settlement, court order or transfer agreement should clearly explain ownership and how the buyout proceeds will be distributed.
A home. A transition. A way forward.
Divorce Equity Buyout Refinance
Explore a path to keeping your home while buying out your spouse’s share of the equity. Jennifer can help you understand how a new mortgage may fit your settlement and your next chapter.
Understanding the option
Divide the equity.
Keep a place to call home.
An equity buyout refinance replaces the existing mortgage with a new loan and uses approved proceeds to pay the departing spouse’s agreed share. The spouse staying in the home must qualify for the new mortgage.
A documented divorce buyout may qualify for treatment other than a standard cash-out refinance. Fannie Mae calls its eligible option a limited cash-out refinance. Freddie Mac has separate requirements for buyout transactions; Jennifer will review which loan structure fits your situation.
A sustainable payment
Review your income, credit, debts, available assets and expected housing expenses before committing to a settlement deadline.
A coordinated closing
The refinance, payoff of the existing mortgage, equity payment and title transfer must work together.
Why loan structure matters
A buyout is worth a closer look.
Eligible buyouts may offer different pricing and loan-to-value limits than a standard cash-out refinance. The available terms depend on the program, property, appraisal and your qualifications.
A lower rate, lower costs or financing above 80% of the home’s value is never automatic. Compare the complete payment, closing costs and any mortgage insurance before deciding.
Review your situationFrom agreement to closing
Your next steps
01
Start with a conversation
Discuss who wants to keep the home, existing loan balances, the proposed buyout and the settlement timeline.
02
Review the documents
Gather the signed agreement, mortgage statements, ownership history, income records and asset statements. Jennifer will identify what else is needed.
03
Qualify and close
Complete the application, valuation and underwriting. Coordinate the approved equity payout and ownership transfer with your closing team.
A Fannie Mae requirement to plan around
Its co-owner buyout provision generally requires at least 12 months of joint ownership before the new loan disburses, a signed written transfer agreement, and no refinance proceeds paid to the owner keeping the home. That borrower must qualify under the applicable underwriting rules.
Questions about the family home
Does a divorce decree remove someone from the mortgage?
A title change or divorce agreement alone does not release a borrower from the loan. Confirm a refinance payoff or an approved release of liability directly with the mortgage servicer.
Can I borrow extra money for other expenses?
Extra funds for unrelated debt or personal expenses may change the transaction’s classification. Discuss all intended uses of the proceeds before choosing a program.
Should I plan before the settlement is final?
Yes. Reviewing mortgage qualifications early can help you and your professional advisers evaluate the proposed buyout and timing. Visit Jennifer’s pre-divorce mortgage planning page to begin.
Educational information only. Approval, pricing, loan limits and documentation depend on current program and lender requirements. Coordinate legal and tax questions with your own advisers.
Further reading: Extreme Loans’ divorce buyout overview · Fannie Mae buyout requirements · Freddie Mac refinance guide