Divorce & Your Mortgage — Keeping the Home When a Marriage Ends
One of the most stressful parts of a divorce is figuring out what happens to the home. If one spouse wants to keep it, there are real steps that need to happen — and the order and timing of those steps matters more than most people realize. At First Commerce Financial, we have guided homeowners through divorce refinances for nearly 30 years. We will give you straight answers about what is possible, what is required, and what to watch out for.
This is not legal advice — you need a family law attorney for that. But the mortgage side of a divorce is our lane, and we know it well.
Talk to Kirk or Ken About Your SituationThe #1 Thing People Get Wrong About Divorce and Mortgages
A divorce decree does not remove your spouse from the mortgage. Even if a judge awards the home to one spouse, the mortgage lender is not a party to the divorce. Both names stay on the loan until the mortgage is either refinanced or formally assumed.
This means if the spouse who keeps the home stops paying, the other spouse's credit is still on the line. It means the departing spouse's debt-to-income ratio still includes the mortgage — which can make qualifying for a new home harder. The only clean solution is a refinance into one person's name.
A quitclaim deed removes someone from the title (ownership) — but not from the mortgage (liability). Both steps need to happen.
Before vs. After Legal Documents Are Filed
The timing of where you are in the divorce process significantly affects your options. Here is how the two scenarios differ.
Before Legal Documents Are Filed
If you are considering divorce but no paperwork has been filed yet, you have the most flexibility. Both spouses are still legally married and can act jointly.
- Both spouses can apply together for a refinance
- Both incomes can be used to qualify
- No divorce decree is required by the lender
- Equity can be restructured before the division is court-ordered
- Faster and simpler process than post-filing
Note: If one spouse wants to remove the other from the loan at this stage, they still need to qualify on their own income — lenders will not simply drop a borrower without full underwriting.
After Legal Documents Are Filed
Once divorce proceedings have begun, courts in many states issue automatic orders freezing major financial changes — including refinancing. This is designed to protect both parties while assets are being divided.
- Most lenders require a finalized divorce decree before removing a spouse
- The decree must clearly state who gets the home
- Any equity buyout amount must be specified in the settlement
- Court approval may be needed before refinancing can proceed
- Consult your divorce attorney before applying
The cleanest path: finalize the divorce, get the decree, have your attorney prepare the quitclaim deed, then refinance.
The Full Process — Step by Step
If one spouse is keeping the home and needs to remove the other from both the title and the mortgage, here is how the process typically works.
Finalize the divorce decree
The settlement must clearly state who gets the home, whether a buyout is required, and what amount the departing spouse is owed. A vague or incomplete decree will stop the refinance cold.
Determine if a buyout is needed
If the departing spouse has equity in the home, that equity must be paid out. The most common method is a cash-out refinance — the staying spouse borrows against the home's equity and pays the departing spouse their share at closing. Conventional loans typically allow up to 80% LTV; VA loans may allow up to 100%.
Apply for the refinance in one name
The staying spouse applies for a new mortgage using only their own income, credit, and assets. The new loan pays off the existing joint mortgage. This is where qualification on a single income becomes the key challenge.
Execute the quitclaim deed
The departing spouse signs a quitclaim deed transferring their ownership interest in the property. This is typically handled at closing simultaneously with the refinance. The deed is then recorded with the county.
Close the loan
The new mortgage closes in the staying spouse's name only. The old joint mortgage is paid off. The departing spouse receives their equity buyout (if applicable) and is released from all mortgage liability. The staying spouse now owns the home and the mortgage solely.
Qualifying on One Income — The Real Challenge
Most couples bought their home qualifying on two incomes. The divorce refinance requires one spouse to qualify alone. This is often the biggest hurdle — and the one we help people work through most often.
✓ Things That Help You Qualify
- Strong individual credit score (720+ is ideal)
- Alimony or child support income — if the divorce decree guarantees payments for at least 3 years, lenders can count it as qualifying income
- Significant equity in the home — lowers LTV and risk
- Other income sources (rental income, self-employment, investments)
- Low existing debt outside the mortgage
✗ Things That Create Challenges
- Low individual income relative to the mortgage payment
- High DTI when combining mortgage with other debts
- Damaged credit from missed payments during the divorce process
- Little or no equity — makes a buyout harder to fund
- Self-employment with limited documented income
If you are not sure whether you can qualify on your own, call us before you assume you cannot. We shop across multiple wholesale lenders and know which programs have more flexible qualification guidelines. There are options most people do not know exist.
Why an Independent Broker Is the Right Call for a Divorce Refinance
A divorce refinance is not a standard transaction. The income picture is different. The documentation requirements are more complex. The emotional stakes are higher. This is exactly when having an independent broker — rather than a single bank — matters most.
We shop your situation across multiple wholesale lenders to find the program that fits your specific income, credit, and equity profile. Some wholesale lenders are more flexible on DTI. Some have better programs for borrowers using alimony as qualifying income. Some have better rates on cash-out refinances used for equity buyouts.
A bank shows you their one option. We show you the best option from dozens.
Kirk or Ken will work through your numbers honestly before you ever apply — so you know exactly where you stand.
Frequently Asked Questions
Can I remove my spouse from the mortgage without refinancing?
Rarely. Some lenders offer a loan assumption or release of liability, but most will not do this without a full refinance. It is worth asking your current lender, but do not count on it. A refinance is almost always the required path.
Does a quitclaim deed remove my spouse from the mortgage?
No — and this is the most common misunderstanding in divorce mortgage situations. A quitclaim deed removes a person from the title (ownership of the property), but it does not affect the mortgage. If your spouse signs a quitclaim deed but the mortgage is not refinanced, they no longer own the home but they are still fully liable for the debt.
Can I use alimony or child support to qualify for the refinance?
Yes — if the divorce decree or settlement agreement specifies that support payments will continue for at least three years, most lenders will count that income toward your qualifying income. This can make a significant difference for borrowers whose individual employment income alone would not be enough.
What if I cannot qualify for the mortgage on my own?
You have a few options: work on improving your credit and reducing debt before applying, explore whether alimony or support income helps your qualification, consider a lower loan amount if you have equity to work with, or in some cases sell the home and divide the proceeds. We will run the numbers with you honestly so you can make the right decision for your situation.
Can I refinance while the divorce is still in process?
It depends on your state and whether a court has issued automatic temporary restraining orders freezing financial changes. Many divorce attorneys advise against refinancing before the decree is final because it can complicate asset division. Most lenders also require the finalized decree before removing a spouse. Talk to your divorce attorney first.
How long does a divorce refinance take?
Typically 30 to 45 days from application to closing, assuming the divorce decree is finalized and documentation is clean. Complex situations — high debt, damaged credit, disputed equity — can take longer. Starting the conversation early gives you the most time to work through any qualification issues.
What if my spouse will not cooperate with the quitclaim deed?
This is a legal question for your divorce attorney, not a mortgage question. If the divorce decree awards you the home, your attorney can seek a court order compelling the transfer. Do not attempt to refinance until the title situation is resolved — lenders require clean title.
What states do you serve?
We are licensed in Michigan, Florida, Arizona, and Texas. First Commerce Financial NMLS #137512.
Let's Run Your Numbers
If you are navigating a divorce and need to understand your mortgage options, call Kirk or Ken directly. We will give you an honest read on what you qualify for, what it will cost, and what steps need to happen — before you commit to anything.
Talk to Kirk or Ken — No ObligationOr call or text us directly at (248) 459-5511
First Commerce Financial | Independent Mortgage Broker | NMLS #137512 | Licensed in Michigan, Florida, Arizona, and Texas | This page is for informational purposes only and does not constitute legal advice. Consult a licensed family law attorney for advice specific to your divorce situation.
