Divorce Equity Buyout - How To Pursue When You Want To Keep The Home

Mortgage and Lending with CMG Mortgage, San Diego, CA NMLS 259027

When Homeowners decide to pursue a divorce, it is fairly common for one of the Divorcing Homeowners to want to stay in (and retain) the home.  For purposes of gender neutrality, we refer to the Spouse who wants to stay in the home as the "In Spouse" and the Spouse who departs the home as the "Out Spouse".

With the above in mind, there is typically at least 1 mortgage secured by the "marital home" which is often in the names of BOTH spouses.  In addition to wanting his/her share of the equity in the home, the "Out Spouse" will typically demand that the "In Spouse" remove the "Out Spouse" from any mortgage obligations on the marital home as part of a process called an "Equity Buyout."

So how does an "In Spouse" find out if he/she will qualify for an Equity Buyout?



  1. Initial consultation with a Mortgage Lender (ideally a Certified Divorce Lending Professional)
    • This meeting will serve to communicate specific goals and determine a strategy for success.
    • NOTE: To maximize options, this meeting should be held as early in the divorce process as possible 
  2. Complete a Loan Application
    • As part of this stage, the Mortgage Lender will pull credit
    • Supporting documentation (i.e. paystubs, bank statements, etc.) will be requested
  3. Discuss initial Equity Buyout Pre-Approval terms (subject to change while the divorce is in process)
    • Your Mortgage Lender should discuss specific strategies and/or logistics
  4. Maximize your chances at success (by following these steps whenever possible)
    • Do NOT change jobs and/or reduce hours without speaking with your Mortgage Lender 
    • Avoid big purchases (i.e. new car, furniture, appliances, etc.0
    • Limit use of Credit Cards (as much as possible)
    • Continue to pay debts on time (the Mortgage Lender is not done looking at your credit this early in the process)
    • Limit withdrawals from Checking/Savings accounts (as much as possible)
    • Avoid additional credit report inquiries
    • Do NOT apply for any new loans and/or credit cards (this includes "co-signing" for someone else)
  5. Anticipate requests for updated documentation (even an updated credit report) depending on how long the divorce process lasts
    • This is the reason why the recommendations in "Step 4" above are so important
  6. Property related analysis
    • Review of title history, property appraisal, etc.
  7. Assuming you are approved for the loan, it is time to "lock in" your interest rate and cost structure
  8. Final steps:
    • Sign final Loan Documents (aka "Loan Docs")
    • Funding (when the Bank "lets go of the money")
    • Disbursement of Funds to the "Out Spouse" when applicable

While different steps may be applicable for each individual divorce case, the above steps can serve as a framework of what to expect.  



  • Mortgage Lending - CLICK HERE to find a Certified Divorce Lending Professional (CDLP) near you.
  • Real Estate - CLICK HERE to find a Certified Divorce Real Estate Expert (CDRE) near you.
  • Other Divorce Professionals (Mental Health, Finance, Tax, etc.) - CLICK HERE to find a Certified Divorce Specialist (CDS) near you.
  • To access additional Divorce Mortgage Tips (for Homebuyers and Homeowners), CLICK HERE

For more information and/or a referral to a qualified Divorce Attorney, please contact me directly (my contact information is listed below).


Jason Gordon is a Divorce Mortgage Specialist with extensive experience working with Divorcing Homeowners & Home Buyers. As the only Mortgage and/or Real Estate professional in the country to earn a CDLPCDRECDSand RCS-D, Jason has been trained to proactively identify obstacles divorcing clients face when trying to obtain mortgage financing. Jason also provides collaborative guidance during the settlement process to better enable future mortgage financing opportunities.

Please contact Jason Gordon directly if you are a Divorce Attorney seeking Expert Services for your active court cases.

To download Jason Gordon's CV, please CLICK HERE

Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
CEO of Vision Drive Realty - Coastal San Diego

Great info my friend. We both unfortunately have a lot of experience with serving divorcing couples, but at least we can bring them great info like this that you have shared today! Great to see you posting again. I know you've been slammed at the office.

Feb 19, 2021 06:26 AM