An equity buyout refinance is how one spouse keeps the family home in a California divorce while the other receives their fair share of the equity. It is a standard mortgage transaction with a few divorce-specific considerations — and DiVita Home Finance handles these regularly.
How an Equity Buyout Refinance Works
The keeping spouse refinances the existing joint mortgage into a new loan in their name only. The new loan is sized to cover both the payoff of the existing mortgage AND a cash payment to the departing spouse representing their equity share.
Example calculation:
- Home value: $1,200,000
- Existing mortgage balance: $500,000
- Total equity: $700,000
- Departing spouse’s share (50%): $350,000
- New loan amount: $500,000 (payoff) + $350,000 (buyout) = $850,000
The new $850,000 loan is in the keeping spouse’s name only. At closing, $500,000 pays off the old mortgage and $350,000 goes directly to the departing spouse. Both parties are done financially with the property.
Qualifying on a Single Income
The central challenge: you now need to qualify for a larger loan on one income instead of two. DiVita Home Finance looks at all available income sources:
- W-2 or self-employment income
- Alimony or spousal support (counts as qualifying income if documented and ongoing)
- Child support received (also qualifies if documented)
- Rental income from other properties
- Investment income, pension, or social security
Timing the Refinance with Your Divorce Settlement
Most lenders require a final divorce settlement agreement or court order before approving the buyout refinance. We can start your loan application earlier using a draft settlement, so you are ready to close quickly once the agreement is finalized. Coordinate your attorney’s timeline with your mortgage timeline from the start.
The Quitclaim Deed
The refinance removes the departing spouse from the mortgage — but not automatically from the title. A quitclaim deed must also be recorded transferring their ownership interest. Your escrow company or real estate attorney handles this at or after closing.
📞 Call (800) 239-1103 to start the pre-qualification process for your California equity buyout refinance. We work discreetly and efficiently so you can move forward.
See all divorce mortgage options at DiVita Home Finance
About DiVita Home Finance
DiVita Home Finance is a small, family-owned mortgage company based in Marin County, California. When you call, you speak directly with Michael DiVita — the owner — not a call center, not an out-of-state rep, not someone reading from a script. We’re here for a low-key, no-obligation conversation about your situation.
We take your privacy seriously. We will never sell your information to third-party lenders or lead generation companies — unlike many of the large mortgage platforms. Your inquiry stays with us, period.
📞 Call: (800) 239-1103 | 💬 Text Michael directly: (310) 849-9124
