“So… who gets the house?”
It’s the question no one wants to answer. The elephant in the mediation room. It shows up right after you’ve figured out custody, divided the furniture, and agreed who keeps the dog.
In the aftermath of a divorce, the house becomes more than just four walls and a mortgage. It’s equity. It’s leverage. It’s an emotional battleground disguised as real estate.
And if you’re the one staying? There’s a good chance refinancing is in your future.
More specifically: divorce refinancing with conventional home loans.
It’s not just about removing a name from a mortgage — it’s about resetting the financial deck, reclaiming stability, and navigating a process that’s as emotional as it is transactional.
Let’s walk through how this works, why conventional home loans from Union Home Mortgage are often the smartest option, and what you’ll need to qualify when flying solo.
Why Refinance After a Divorce?
Let’s be real: continuing to co-own a house with your ex-spouse isn’t exactly a clean break. Unless you’re best friends (and even then…), shared real estate becomes shared risk.
Refinancing serves multiple purposes:
- Removes your ex from the mortgage and note
- Allows one person to take full ownership of the property
- Enables a buyout using equity
- Restructures the loan around one person’s income
- Offers peace of mind — no lingering financial ties
Staying in the home? Refinance. Leaving and want to be removed from liability? Refinance. Splitting equity fairly? You guessed it: refinance.
Why Choose Conventional Home Loans?
You have options — FHA, VA, USDA — but conventional home loans are often the go-to for divorce scenarios. Why?
Simple: flexibility and long-term value.
Conventional loans are not government-backed. Instead, they follow guidelines set by Fannie Mae and Freddie Mac, and they offer:
- Higher loan limits
- Better rates for qualified borrowers
- No mortgage insurance if you have at least 20% equity
- Smoother transitions when the original loan was already conventional
If you’re in decent financial shape post-divorce and the home has equity, conventional loans keep your monthly payments lean and your options open.
Credit: You’re Standing on Your Own Now
You used to have a co-borrower. Now you don’t.
That means the lender is looking solely at your credit score, your income, and your financial liabilities.
For conventional home loans, the minimum credit score is typically 620, but you’ll get better rates with 740 or higher. The higher your score, the more favorable the terms — and the more likely your application gets that coveted green light.
Real Talk:
Divorce doesn’t directly hurt your credit score, but indirect effects — like missed payments on shared accounts or confusion over who’s paying what — absolutely can. Clean things up before you apply.
- Pull all three credit reports
- Dispute any errors
- Close joint credit cards or have one party removed
- Make every payment count — consistency builds trust with lenders
Debt-to-Income (DTI): Can You Handle It Alone?
Let’s talk math.
Lenders calculate your debt-to-income ratio — how much of your monthly income goes toward debt. For conventional loans, the ideal DTI is 43% or lower.
Here’s what gets included in that calculation:
- Your proposed new mortgage payment
- Auto loans
- Credit card minimums
- Student loans
- Any court-ordered spousal or child support you pay
But here’s the kicker: if you’re receiving support payments, you can use them as income — if you can show they’ve been consistent for 6+ months and are expected to continue for at least 3 years.
Pro Tip:
Lenders will ask for documentation — typically your divorce decree and payment records or deposits — so keep everything organized.
Equity: The Power (and Problem) of the Property Value
Equity is the name of the game when it comes to refinancing — especially if you’re using it to buy out your ex’s share of the home.
Let’s break it down:
- Home appraises at $450,000
- Remaining mortgage balance is $300,000
- That’s $150,000 in equity
If the court orders a 50/50 split, you’ll need access to $75,000 — which a cash-out refinance can provide.
But here’s the rub: if your equity is too low, you may not qualify for a cash-out, or you may be forced to carry private mortgage insurance (PMI), adding to your monthly costs.
Strategy:
Run some preliminary numbers before applying. If you’re tight on equity, talk to a lender about other options — second mortgages, HELOCs, or blended products.
Appraisals: The X-Factor
No matter how solid your plan is, your refinance hinges on one unpredictable element: the appraisal.
If the home appraises lower than expected, your equity shrinks. That affects your LTV (loan-to-value) ratio, and it may derail a cash-out scenario altogether.
This can be especially frustrating during divorce, where one spouse may think the home is worth more — or wants it to be worth more to justify a buyout.
Mitigation Move:
Consider a pre-listing appraisal or a CMA (comparative market analysis) from a local real estate agent. It’s not legally binding, but it gives you a ballpark before committing to a lender’s process.
Don’t Forget the Title
Removing your ex from the mortgage doesn’t automatically remove them from the title.
You’ll need a quitclaim deed or other legal documentation to transfer ownership — often coordinated alongside your refinance closing. The timing has to align, and it must be done correctly, or you risk future legal and financial issues.
Work With a Divorce-Savvy Lender
This is not a regular refinance.
There are court orders involved. Timelines. Emotions. Title changes. Documentation that doesn’t always come with neat cover pages.
You need a lender who understands how divorce changes the financial equation — and who can guide you through the extra layers with clarity and care.
Start with Union Home Mortgage — a team that works directly with divorcing clients to streamline refinance processes, manage equity splits, and handle the real-life complexities most lenders don’t talk about.
The Bigger Picture: Financial Closure
Refinancing isn’t just about getting a lower rate. It’s about independence. Finality. A chance to build financial health on your own terms.
With the right lender and the right loan, conventional home loans allow divorcing homeowners to:
- Cut the financial cord
- Restructure their future
- Keep the house (or walk away from it clean)
- Rebuild their credit under one name, not two
And most importantly? Move forward without dragging old baggage behind.
Final Word: This Is the Hard Part Before the Better Part
Divorce refinancing is never just paperwork. It’s part of the transition — a moment of financial reckoning and relief rolled into one.
You’ll probably feel frustrated at times. Maybe overwhelmed. But with the right tools, you’ll also feel empowered.
Because when it’s all done — and your name is the only one on that mortgage — what you’ve really gained is peace.
