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6 things to know about refinancing a mortgage after a divorce

Bankrate Logo By Marcie Geffner of Bankrate | Slide 2 of 7: Perhaps the most common reason to refinance after a divorce is that you want to keep your home and need cash to buy out your spouse’s share of the equity.For example, suppose your home is worth $300,000 and you owe $200,000 on your mortgage. You have $100,000 equity, and you need $50,000 to buy out your spouse’s share, if you’ve agreed to a 50-50 split. To get the money, you refinance into a $250,000 loan and cash out $50,000. The new loan is in your name only.Use Bankrate’s calculator to see what your new monthly mortgage payments would be.If you buy out your spouse’s ownership interest in the home, make sure he or she signs a quit-claim agreement or other legal document to be removed from the title. Otherwise, you’ll be solely responsible for the mortgage but your ex will still own a portion of your home.

A refi could help you keep your house

Perhaps the most common reason to refinance after a divorce is that you want to keep your home and need cash to buy out your spouse’s share of the equity.

For example, suppose your home is worth $300,000 and you owe $200,000 on your mortgage. You have $100,000 equity, and you need $50,000 to buy out your spouse’s share, if you’ve agreed to a 50-50 split. To get the money, you refinance into a $250,000 loan and cash out $50,000. The new loan is in your name only.

Use Bankrate’s calculator to see what your new monthly mortgage payments would be.

If you buy out your spouse’s ownership interest in the home, make sure he or she signs a quit-claim agreement or other legal document to be removed from the title. Otherwise, you’ll be solely responsible for the mortgage but your ex will still own a portion of your home.

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