What Is a Divorce Buyout Mortgage?

A divorce buyout mortgage is sometimes needed when a couple is splitting up and they own a home together. Here are the basics of the divorce buyout mortgage.

Divorce Buyout Mortgage

When a married couple has a property together and decides to divorce, something is going to have to happen to this investment in order to split it up equally. Sometimes, they are going to sell the property and split the profits evenly. However, in some cases, one of the spouses will remain in the property after the divorce. In this case, the spouse who continues to live in the property is going to have to buy out the equity of the other spouse. This can be done with a divorce buyout mortgage.

How It Works

The spouse who is going to live in the property has to refinance the property with this type of mortgage. He or she will get an appraisal on the property and then get the mortgage. With the money from the mortgage, he or she will first pay off the existing mortgage balance. He or she will give half of the money left over to the other spouse and keep the rest.

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