In many divorce cases, one of the spouse will want to keep the family home following the divorce. Refinancing is sometimes a necessary action to take in order to buy-out the other spouse’s interest, or ownership of the property. This is a common step taken because unless the spouse that wants the house has a significant amount of money that can be used in the buy-out, or there are some assets that can be exchanged for the share of the home.
Refinancing is a form of taking out a loan, and the new loan must be in the buying spouse’s name only. Out of that loan, the spouse intending to buy-out must subtract the amount of money from the home equity in order to pay the non-buying spouse.
To begin this procedure, you have to value the house, subtract the unpaid mortgage balance, and calculate your share in the remaining equity. To have the house valued, a certified real estate agent should be hired, one that is agreed upon by both spouses. Or, if an agent cannot be agreed upon, each party can get an appraiser, and submitting opposing appraisal reports to the court, where a judge would decide which value seems to be the most reasonable and applicable.