Part 2-Equity Buyout- Divorce Refinance Requirements
Divorce Refinance: Equity Buyout Requirements
Considering an equity buyout during your divorce? Understanding your options is essential. In the first part of our equity buyout series, we covered the fundamentals of how equity buyouts work and the advantages they offer during property division. Now, let’s dive deeper into additional strategies to help you make the best decision for your financial future.
Now, before we get started, don’t forget to take advantage and download our Divorce Lending Blueprint for Success with the link below. This free guide is designed to help walk you through the qualifying process step-by-step and is a great educational resource for both homeowners and attorneys alike.
1. Joint Ownership Requirement
For an equity buyout refinance on a conventional loan, the property must have been jointly owned by both spouses for at least 12 months prior to refinancing. Typically, this requirement can be verified easily through local property appraiser records.
2. Written Agreement on Equity Distribution
All parties involved must sign a written agreement outlining the terms of the property transfer and detailing the distribution of proceeds from the refinance. Generally, this requirement is met through clearly drafted provisions in the marital settlement agreement, specifically within sections addressing the homestead or marital residence. Ensuring precision and clarity in these documents is critical.
3. Restrictions on Proceeds
Under conventional loan guidelines for an equity buyout refinance, the divorcing homeowner acquiring sole ownership of the property may not directly receive any proceeds from the refinance transaction. Instead, these proceeds must be allocated entirely to the departing spouse or other liabilities specified within the settlement agreement.
Final Thoughts on Divorce Refinancing with Equity Buyout
A divorce refinance with an equity buyout can be an effective way to keep the family home while fairly dividing marital assets. Now that we’ve reviewed the specific requirements for an equity buyout refinance, it’s crucial to evaluate your unique financial circumstances carefully.
As a Certified Divorce Lending Professional (CDLP®) and the chair of our divorce lending practice group, our team has the specialized knowledge and experience to smoothly guide you through every step of the divorce refinance process. We’re here to help clarify your options and answer your questions. To get started or to discuss your personal situation, simply call, text, or email us today.
Call/Text: 813-935-8330
800-806-9836 Ext. 280
SeanS@MPLX.org
Thank you again for forwarding and sharing today’s post with any attorneys, clients, family, or friends who may be in need of our divorce mortgage expertise.
As always, I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!
P.S. – You can download our “Divorce Lending Blueprint for Success” by CLICKING HERE.
