I Want to Buy Out My Spouse’s Interest in the Matrimonial Home

Photo by rawpixel.com on Freepik

I am hearing this more than ever. In separation and divorce, the desire to keep the family home—especially when children are involved—is completely understandable. You want to minimize disruption and maintain stability.

But then, the inevitable question from friends and family hits: "Can you even afford it?" This doubt can fuel the feeling of overwhelm, adding more stress to an already difficult time.

My role as your financial divorce specialist is to cut through that noise and doubt. My job is to determine if your desire is financially sustainable, guiding you through the critical questions with clarity and compassion to uncover practical and creative solutions.

The Financial Check

1. How is the Home's Value Determined?

• The Requirement: A professional, third-party appraisal is almost always required by a lender if you are going to take over the mortgage on your own. It is also the most accurate way to establish a fair market value for the separation agreement. Sometimes a realtor’s Opinion of Value or Comparative Market Analysis, or multiple opinions, are sufficient when the spouses agree on the opinion of the home’s value.
• The Formula: Fair market value minus outstanding mortgages/debts (secured by the home) equals home equity
• The Buyout Amount: Typically, the departing spouse's share is 50% of the home equity (value minus debt), but this amount is often adjusted as part of the overall "equalization payment".

Considering strategies for how equalization can be settled most effectively using a financial divorce specialist can be invaluable.

2. Can I Afford the New Mortgage on My Own?

This is the single biggest hurdle, and you could benefit from specialized expertise. Lenders look at your new financial picture—your income, your debts, and crucially, any child/spousal you pay or receive through a court order or a legally binding separation agreement.

Spousal or child support received is often treated as the recipient’s income by the lender thereby increasing their borrowing power, whereas support payments are treated as the payer’s monthly obligation reducing their future borrowing power.

The Spousal Buyout Mortgage Programs

These unique programs can be a game-changer, allowing the remaining spouse to refinance up to 95% of the home's value. This may be necessary to make the buyout possible without needing a large cash injection which may or may not be available.

As your financial divorce specialist, I always coordinate with a qualified mortgage broker who is experienced in separation and divorce. The broker is crucial, matching your unique financial needs with the appropriate lender programs to secure your financing. These programs may go beyond traditional bank financing solutions.