You want to keep the house. Or you're close to deciding that. Now you're trying to work out how to buy out your spouse from the house without it turning into the longest fight of the divorce.
Most people start with the attorney. That makes sense. The buyout is a loan question before it's a legal one. The decree can say the house is yours. Only a loan pays your ex.
The buyout is a loan question before it's a legal one.
So one question first. Do you know what the house is worth today? Not from a website. From an appraisal.
If the answer is no, that's where this starts. Almost everything else waits on it.
What is a divorce house buyout?
You pay your ex their share of the equity, and the house becomes yours alone.
Equity is what the house is worth minus what's still owed on it. Your ex's share of that is whatever the decree says. In Colorado that's a fair split, not an automatic half. Getting to that split is your attorney's work.
Turning it into a loan you can carry is mine. The calculator on my divorce page runs the rough version on numbers you type in. It's a starting point, not an answer.
How is the buyout amount figured?
The appraisal sets the number.
Start with the appraised value. Take off the mortgage balance and anything else recorded against the house. That's the equity. Apply the split from the decree. That's the buyout.
Sometimes the attorneys trade the house against other things. That part is negotiated. The value under it still comes from the appraisal.
This is where most of the fighting starts. One of you likes the high website number. The other likes the low one.
So what number are the two of you working from right now? And where did it come from?
With a new loan in your name alone, most of the time.
Few people have their ex's share sitting in checking. So the money comes out of the house, one of two ways.
The first is a refinance. One new mortgage, in your name, big enough to pay off the old loan and pay your ex. Your ex comes off the loan and the title together. It's the clean version.
The second is a separate loan on top of the one you have. You keep the old mortgage and its rate, and the new loan pays your ex. The catch: your ex stays on the old mortgage until it's refinanced or paid off. That only works if the decree allows it.
Which of those fits depends on the rate you'd be giving up. Do you know what yours is?
Can I qualify for the buyout loan on my own income?
Maybe. Find out before the decree, not after.
The new loan is judged on your income alone. The payment that worked on two paychecks now has to work on one.
Child support and maintenance can count as income. But only when they're court-ordered, documented, and expected to keep going. A promise between the two of you doesn't count. Some loans also want to see it's been received for a while.
What hurts: joint debts the decree leaves with you.
If the math doesn't hold, you'll hear it from me before you've fought for the house in mediation. A house you can't carry is not a win.
And if it doesn't hold, when would you rather find out? Now, while the split can still change? Or after the decree is signed?
What does the decree need to say for the loan to fund?
Enough that an underwriter doesn't have to guess.
Lenders read decrees line by line. Who gets the house. The buyout amount or how it's figured. When it's due. That your ex will sign the deed over. Vague wording means questions, and questions mean delay.
I give your attorney the mortgage side of that wording before the decree is final. Beside your attorney, not instead of them.
How do you buy out a spouse from the house, start to signing day?
In this order. The order is most of it.
First, a conversation about where things stand. Then the application, so the numbers are real. Then the appraisal. Then the loan on paper, with the payment for each option.
Your attorney negotiates the decree around those numbers. I send the lender side of the wording. Once the decree is entered, the loan funds, your ex gets paid, the deed moves, and you sign.
A mom in Eagle wanted to keep the house near the kids' school. We appraised first, and both attorneys agreed to use the number. Her child support had been ordered early and paid every month since, so it counted. We ran the refinance before the split was final, and it held. The decree was entered, the loan funded that week, her ex was paid and off the mortgage, and the kids never changed schools. Nothing about her file was unusual. The order was.
Colorado has a waiting period between filing and the decree. Most of the loan work fits inside it, so the money moves the same week the decree does.
I've been through a divorce myself. The worst part was not knowing. This order takes most of that out.
