Can I refinance before the divorce is final?

What the lender decides

No rule of divorce law guarantees you a refinance. The lender decides whether you qualify on your own income and credit, what paperwork it needs, and whether your situation fits its programs. For a Fannie Mae loan, the Selling Guide allows a divorce buyout to be treated as a limited cash-out refinance if the home was jointly owned for at least 12 months, there's a written agreement covering the transfer, and the borrower keeping the home receives none of the proceeds.

Ask the lender exactly which written agreement it will accept. Then show that answer to your attorney.

The status quo order matters

Timing in Oregon has a court side. Once the summons and petition are served, ORS 107.093 restrains both spouses from transferring or encumbering property the other has an interest in without the other's written consent or a court order, until the judgment, a dismissal or a further order. A new loan secured by the house is an encumbrance.

So if papers have been served, ask your attorney whether your refinance needs your spouse's signed consent or an order. What is the Oregon status quo order? explains the restraint.

Lining it up with the case

In practice, the refinance, the deed and the settlement all have to point the same way. Your attorney can tie the deed to the refinance closing, so the spouse leaving the loan signs when the old loan is actually paid off. If the refinance falls through, you'll want a fallback written down, such as a deadline after which the house is listed for sale, so neither of you is left waiting on a loan that may never close. What if I can't qualify to refinance alone? covers that.

I'm not a lender. I can share the same market information with both of you while you decide.

Start with a lender

Talk to a lender before you sign a settlement that depends on a refinance. Bring your income documents, the current mortgage statement and a draft of the agreement, and ask what the lender would need to see to approve a buyout. Do it early. A real answer from a lender gives your attorney something concrete to plan around, which a website calculator can't.