Divorce Buyout Refinance
Refinance to remove your ex from the loan and buy out their share of the equity. With a written agreement signed by all parties, Fannie Mae treats the buyout as a limited cash-out refinance when the home was jointly owned for at least 12 months.*
Quick answer
Saxton Mortgage does. At least one conventional program we offer treats buying out an owner’s interest as a limited cash-out refinance, with a written agreement that is legible and signed and dated before or at application. At least one borrower must be on title individually before the application date, a home held in an LLC does not qualify, and cash back at closing is capped at the greater of 1% of the new loan amount or $2,000.
Divorce Mortgage Buyout: The house stays. The loan changes hands.
Buying out a co-owner is treated as a limited cash out rather than a cash out refinance, which matters more than most people expect.
- Buying out an owner’s interest is a limited cash out refinance*
- Written agreement required, signed and dated before or at application*
- At least one borrower must be on title before the application date*
- Cash back to the borrower at closing is strictly limited*
- A property vested in an LLC is not eligible*
- The remaining party qualifies for the new loan on their own
Treated as a limited cash out refinance*
Buying out an owner’s interest is a limited cash out, not a cash out*
A written agreement is required, signed and dated before or at application*
At least one borrower must already be on title before the application*
Cash back to you at closing is strictly limited*
A property held in an LLC is not eligible*
What is the Saxton Divorce Buyout Refinance?
A refinance that removes one party and pays out their share
This replaces the existing mortgage with a new loan in the remaining party’s name alone, sized to cover the balance and the departing party’s share of the equity. One person keeps the house and the other is released from the loan.
Two things decide this one: whether the written agreement is in place at application, and whether the remaining party qualifies for the new loan alone. Get both right and it is a limited cash out rather than a cash out.
The important part is how it is classified. Buying out a co-owner’s interest is treated as a limited cash out refinance rather than a cash out refinance, provided a written agreement is in place. Limited cash out prices better, which is why the paperwork order matters.*
Why choose the Saxton Divorce Buyout Refinance?
Built for the party keeping the home, on a timeline set by a court rather than by the market.
Better Than Cash Out
An owner buyout is classified as a limited cash out when it is documented properly, which prices better than a cash out refinance.*
The Agreement Comes First
The written agreement has to be legible, signed and dated before or at application. Arriving with it already done saves weeks.*
Removing A Name
A divorce decree does not remove anyone from a mortgage. Only a refinance or a formal release does that, which is why this transaction exists.
Already On Title
At least one borrower has to be on title before the application date, which is normally the case in a buyout.*
Not Through An Entity
A property held in a limited liability company does not meet ownership requirements. It has to be held individually.*
Little Cash Comes Back
This is not a way to take money out. Cash back to the borrower at closing is strictly limited, and the proceeds go to the departing party.*
Hear From Homeowners Like You
Frequently Asked Questions
Straight answers about buying out a co-owner.
Saxton Mortgage does. At least one conventional program we offer treats buying out an owner’s interest as a limited cash-out refinance, with a written agreement that is legible and signed and dated before or at application. At least one borrower must be on title individually before the application date, a home held in an LLC does not qualify, and cash back at closing is capped at the greater of 1% of the new loan amount or $2,000.
No, and this is the single most common misunderstanding. A decree governs what you owe each other. It does not release anyone from an obligation to a lender. Only a refinance or a formal release does that.
Because an owner buyout documented properly is treated as a limited cash out refinance rather than a cash out refinance, and limited cash out prices better. The classification is worth real money over the life of the loan.*
A written agreement covering the buyout, legible, signed and dated before or at the time you apply. Bringing it already executed is the single biggest thing you can do to keep this moving.*
Yes. At least one borrower has to be on title individually before the application date on the new loan, which is normally already true in a buyout.*
Not meaningfully. Cash back to you at closing is strictly limited on a limited cash out. If you need to take substantial equity out as well, that becomes a cash out refinance and prices differently.*
It is not eligible while it is held that way. Ownership has to sit with an individual borrower rather than with a limited liability company.*
Timing depends on your agreement and your state, and it is genuinely a question for your attorney as much as for a lender. What we can do is have the file ready to move the moment the paperwork allows it.
An equity buyout is one owner paying the other for their share of the value in the home so that one of you keeps it. The equity buyout refinance is how it gets funded: the new loan pays off the existing mortgage and the departing party’s share in one transaction, and it is treated as a limited cash out rather than a cash out refinance.
It has to be written, signed and dated before or at application, and it has to establish who keeps the home and what the other party receives for their interest. A settlement agreement or the relevant part of a marital settlement agreement usually does this. Without that document the file cannot be classified as a buyout.
Refinancing is what removes a person from the loan, because the old note has to be paid off and replaced with one in your name. A quitclaim deed is a different thing: it moves someone off the title but leaves the existing mortgage exactly as it was, with both names still liable on it. That distinction catches a lot of people out.
Fannie Mae treats the buyout as a limited cash-out refinance when all parties jointly owned the home for at least 12 months before the new loan funds. A recent inheritance of the home is the exception.
Yes. Fannie Mae’s buyout rule covers one owner buying out another owner’s interest, for example after a divorce or the end of a domestic partnership. The same written agreement and 12 months of joint ownership apply.
Find out what you qualify for
If you are keeping the home and buying out the other party, there is likely a Saxton Divorce Buyout Refinance that fits. Get a fast, no obligation pre-qualification today.
Get Pre-Qualified*Loan amounts, rates, terms, and down payment requirements are subject to credit approval, income and asset verification, and program eligibility. A limited cash-out refinance to buy out an owner’s interest requires a written agreement signed and dated prior to or at application, and cash back to the borrower is strictly limited. Properties vested in a limited liability company are not eligible. This is not legal advice. Not all applicants will qualify. Saxton Mortgage, LLC is an Equal Housing Lender.