A refinance involves a borrower obtaining a new mortgage to repay an existing mortgage. Refinances are generally done during a divorce when only 1 party is keeping the house, and the other party does not need to be legally accountable for payments. Refinancing a mortgage during divorce may be the only method to maintain the marital residence.
Clean up your charge if possible. Pay your debts off and try to boost your credit score as much as you can. Refinancing with a low credit rating can be tough, and you can get an expensive loan with a high interest rate.
Obtain ownership of the house. You’ll need a settlement agreement signed and notarized by you and your spouse which provides you sole possession of the house. The agreement has to be ratified by a judge. Use a divorce lawyer to prepare and file the agreement if you’re unsure the way to do so.
Get a deed from your spouse to you. A deed is the legal document used to demonstrate ownership of property. A quit claim deed, or deed that is not guaranteeing anything regarding the condition or legal standing of the house, is typically used in divorces. Have your lawyer draft the deed if you’re unsure about the right wording. File the deed in the county recorder’s office to your property’s location. Fees for recording vary by place.
Find a mortgage lender. Obtain interest rate estimates from more than 1 lender to ensure you’re getting the best loan terms available for you. Speak to a loan officer. Some banks offer discounts on mortgage application fees or other considerations to existing clients.