Separations often leave one person keeping the home and a pile of shared or individual debts. A refinance can sometimes handle both: buying out the other person and consolidating debts.
What a refinance can do
- Pay out the existing mortgage
- Pay your former partner their share of the equity
- Pay off debts that are being assigned to you
What lenders need
- A signed separation agreement or court order
- Proof you qualify on your own income
- Details of support payments you pay or receive
- An appraisal
Watch your equity
Buying someone out and consolidating debt both use equity. Make sure there’s enough left as a cushion. See equity needed.
Joint debts
Even after separation, joint debts may remain your responsibility to the lender until they’re paid. Paying them off at closing cleanly separates your finances.
Get legal advice first
How debts and property are divided is a legal question. Have a family lawyer review your agreement before you finalize a refinance.
This article is general information, not financial or legal advice. Lender requirements, rates and fees change and depend on your situation.