On this page
The 45 reporting states and D.C. recorded about 670,000 divorces in 2023, according to the CDC. That works out to roughly one every 47 seconds. When you add shared homeownership to divorce, things can get even more complicated. This article covers the main mortgage options in a divorce: selling the home, refinancing it or renting it out.
Homeowners going through a divorce face a variety of difficult matters. Your home is typically the largest shared asset, from both a financial standpoint as well as a sentimental one.
The decisions you make about the home can have a major effect on your long-term financial well-being. Knowing your options as you prepare for separation can make the notion of divorce easier to manage.
Check today's rates here and apply for a conventional refinance (Nov 3rd, 2026)
Selling the home
Selling the home may offer a clean-cut solution for both parties involved.
Neither party may want to stay in the home, or neither may be able to afford it alone. In either case, selling is often the most practical option.
A real estate professional can help determine the sales price. They can also assist with preparing the home for sale, listing and marketing the property effectively, and negotiating offers.
Before you list the home, consider the costs that come due before anyone divides the proceeds from the sale.
For example, you’ll need to pay off the mortgage, second mortgage and home equity line of credit. Brokerage fees and possibly closing costs paid on behalf of the buyer also come due. The divorcing parties need to decide how to pay for all of this.
Another important factor to consider is how long it will take for the home to sell. While the home is on the market, you still owe the mortgage payments, taxes, insurance and potential maintenance fees.
Also, a long, drawn out home sale will just make the entire process more difficult and frustrating for both sides.
You’ll need to factor in these carrying costs and agree on how to share them before listing the home for sale.
Refinancing your home
Another common tactic divorcing couples often use is refinancing the mortgage into one spouse’s name.
In this scenario, the spouse taking the house typically pays off the other spouse’s equity share through a refinance. For a conventional loan, Fannie Mae treats this buyout as a limited cash-out refinance if you jointly owned the home for at least 12 months.
Consider the following scenario as an example:
- A couple purchased a home together a few years ago for $250,000.
- The spouse leaving the property originally contributed $10,000 towards the down payment.
- Since purchasing the home, the property has appreciated by $30,000.
- The spouse staying in the home refinances and cashes out $25,000. That reimburses the departing spouse for their original down payment contribution, as well as half of the $30,000 in appreciation.
The refinance removes the other spouse from the mortgage. Couples sometimes sign a quit-claim deed, which transfers the departing spouse’s ownership interest. The deed alone does not change who owes the mortgage.
Can you qualify for the refinance on your own?
Consider the potential challenges of refinancing and staying in the home without the help of the departing spouse.
For example, you and your spouse may have bought the home on two incomes and a stronger, joint credit rating.
As the remaining spouse, you’ll need to qualify on your own with regard to income and credit. You’ll also carry the additional costs of homeownership on your own:
- Property taxes
- Homeowners insurance
- Homeowners association fees
- Utility bills
- Ongoing repairs and maintenance
Keep in mind that a divorce filing becomes a matter of public record. Whether you can refinance while the divorce is pending depends on the lender and on the court paperwork. Many lenders want the decree or settlement agreement before they close, so ask your lender early.
It’s wise to consider your options as far in advance as possible prior to the divorce.
Some couples may even decide to refinance before filing separation paperwork.
Talk with a mortgage lender ahead of time about whether you will qualify for the mortgage on your own.
Renting your home out
Some divorcing couples may decide to rent out the home.
A longer lease term can be ideal for some couples. It also gives them time to wait until their local housing market is ideal for selling, if it isn’t already.
Another possibility to consider is renting out the home on a month-to-month basis as you figure out your options.
Rent from a month-to-month tenant could help offset the mortgage payment, or earn some extra cash as you go through your divorce proceedings.
A month-to-month tenancy has one more upside: when you’re ready to sell, you can end it with written notice instead of waiting for a lease to run out. Notice periods vary by state, and a tenant who stays past the notice date can still require an eviction.
Protecting your credit and mortgage options during a divorce
A divorce will be challenging enough even without children or property in the picture.
Your goal may be to qualify for a mortgage while you’re still tied to a previous property. In that case, it’s in your best interest to keep an open and amicable line of communication with your soon-to-be ex-spouse. This can help you complete a less stressful mortgage transaction on your own.
It is also imperative to check and protect your credit during the divorce proceedings. A poor payment history on the part of one spouse can significantly impact both parties. That’s true during a marriage, and even more so during a divorce.
Make sure your credit is reporting accurately and reflects the debts that are yours. Your divorce decree may indicate you are no longer responsible for certain financial obligations. However, that doesn’t automatically remove your name from those accounts.
Be sure to contact your lender and creditors about your situation. They can help document your file appropriately. They can offer guidelines for how to go about removing your name from accounts.
Knowing your mortgage options when facing divorce
Regrettably, many marriages don’t last as long as the life of a mortgage.
Fortunately, the end of your marriage doesn’t have to mean the end of your homeownership goals. Divorces are never easy. Still, knowing your mortgage options when considering a divorce can make things less stressful. You could come out of it ready to purchase a home on your own.
Check today's rates here and apply for a conventional refinance (Nov 3rd, 2026)
