Buying Out a Mortgage from Your Spouse: 3 Common Questions

The process of buying out a mortgage from one's spouse can be very confusing for many people. Here are a few frequently asked questions when dealing with a mortgage buyout from a spouse.

1. How Do I Get the Money?

During a divorce, there is a good chance that money is going to be tight. In many cases, someone getting divorced is making a transition from a living situation in which two people contributed financially to relying only on him- or herself. If you have to buy out a mortgage from your spouse, you may not have any idea where you are going to get the money that is necessary. If you do not have enough money to pay for the equity that belongs to your spouse, you may want to consider refinancing the loan. This will allow you to get enough cash to pay off your existing mortgage and then pay off your spouse. You will then have a new mortgage that you can work with. If the interest rate on your loan is lower, you might be able to save some money compared to how you were doing with your previous mortgage.

2. Do I Need to Take My Spouse off the Title?

Most of the time, couples buy property jointly. Because of this, both of their names are usually going to be on the title. If this is the case, you should take the necessary steps to remove them from the title. You do not want them to have any legal right to the property after the divorce has gone through. Whenever you refinance the property, you will be able to remove them from the existing loan as well as the title to the property.

3. How Do I Determine How Much to Pay My Spouse?

If you do not know how much you are going to need to pay your spouse for the buyout, there are a few different things that you can do. The best solution to this problem is to order a real estate appraisal by a certified appraiser. They will be able to come to your house and do a detailed evaluation of the property. This will allow them to give you an accurate value of the property. You could also work with a real estate agent to have them give you a comparative market analysis. Either method will give you an approximate value that you can work with. Once you know the value of the property, you need to subtract the existing mortgage balance from that number. At that point, you need to divide that number by two. This number will represent the amount of equity that belongs to your spouse. In some cases, you may be able to negotiate a slightly different settlement from what you get with this calculation. However, this is going to give you a pretty accurate number to work with on the buyout amount.