Option 2 and 3: keep it

Can I keep the house?

Maybe. It comes down to whether you can qualify for the loan alone at today’s rate, and whether you can pay your spouse their share. Here is the math on a typical Denver home, the three ways to fund a buyout, and the deadline that turns a keep into a forced sale.

Run the numbers with Mike Oswald What is it worth The mortgage after divorce

Call or text 303-955-4220. A live person answers. Not a robot, not a phone tree.

The rate trap

$1,476 becomes $3,308

Replacing a $350,000 loan at 3% with a $500,000 buyout loan at 6.95% more than doubles the payment.

What counts as income

Support counts, with conditions

Six months of receipt and three years of continuance. Short-term maintenance often fails the test.

The deadline

60 to 90 days is common

If the refinance in the decree does not happen, the usual remedy is that the house gets sold.

For the kids

A deferred sale is legal

Colorado lets the primary parent stay for a reasonable period. Write every detail into the decree.

The short answer

You can keep the house if a lender will approve you alone for a loan big enough to pay off the current mortgage and pay your spouse their share of the equity, or if you can pay that share from other assets and either assume the existing loan or keep it with a HELOC. Get pre-approved on the real numbers before the settlement is signed. Never agree to a refinance deadline a lender has not looked at.

The buyout math on a typical Denver home

Detached median $649,500 (DMAR, August 2026). Balance $350,000 at 3 percent, payment $1,476. Equity $299,500, so the departing spouse’s half is $149,750. Three ways to pay it:

A. Cash-out style refinance

New loan $499,750 at 6.95 percent: about $3,308 a month in principal and interest, $3,374 if you roll in $10,000 of closing costs, and roughly $3,870 with taxes and insurance. Income needed at a 43 percent debt ratio: about $108,000 a year with no other debt, about $128,000 with $700 a month of car and card payments.

B. Keep the first loan, add a HELOC

Keep the 3 percent mortgage ($1,476) and add a $149,750 line at about 8 percent interest-only (about $998). Total about $2,474, roughly $830 a month less than the refinance. The catch: your spouse stays on the first mortgage until it is refinanced or the servicer signs a release, and most decrees will not allow that indefinitely.

C. Trade other assets

Give up an equal share of retirement, savings or a second property instead of cash, then assume or keep the existing loan. Value everything after tax first: $300,000 of traditional 401(k) is worth about $221,000 after tax, while $300,000 of home equity nets about $279,000.

A lender detail that matters. Fannie Mae treats a divorce buyout as a limited cash-out refinance, not a cash-out, if you jointly owned the house for at least 12 months. That allows up to 95 percent loan-to-value and better pricing. Freddie Mac treats the same loan as a cash-out, capped at 80 percent. Ask the lender which agency the file goes to before you sign anything.

What income will the lender count?

Your wages, with the usual two-year history.
Maintenance and child support you receive, only with the signed decree or agreement, proof of six months of receipt (three months for FHA on court-ordered payments), and evidence it will continue for at least three years from closing. If maintenance ends within three years, or a child turns 19 within three years, that part does not count. Colorado’s guideline ties maintenance length to marriage length, so short-term maintenance often fails this test.
Debts assigned to your ex in the decree do not have to count against you. Fannie Mae: “the lender is not required to count this contingent liability” when a court order assigns the debt to the other party.
Lump-sum equalization payments are not income.

The refinance deadline

Colorado decrees usually give the staying spouse a window to refinance and remove the other spouse from the loan. Sixty to ninety days is most common; negotiated agreements sometimes allow six to twelve months. The state’s own agreement form has a blank for the date: “The party who will take ownership of the property must transfer title, refinance the loan, and remove the other party from the debt by (date).” If the refinance fails, the standard fallback is that the house must be sold. A refinance itself takes 30 to 45 days, so the application should start the week the decree is signed, and the pre-approval should happen before the decree exists.

Keeping the house for the kids: the deferred sale

Colorado’s property statute lets the court award the home, or the right to live in it “for reasonable periods,” to the parent the children live with most of the time. Couples use this to keep the kids in place until a trigger: the youngest graduates, a fixed number of years, remarriage, or a sale date. It is legal, it is common, and it is where the most arguments happen later. Everything below has to be in the decree.

Who pays whatMortgage, taxes, insurance, HOA, repairs over a set amount. Whether those payments are credited back at sale.

How paydown and improvements are creditedPrincipal paid after the decree and improvements the staying spouse funds are either credited or they are not. Say which.

The exact triggerA date or an event, plus what happens if the event is disputed (a change in the parenting schedule, for example).

Who sells it and howWho picks the agent, how the price is set, the reduction schedule, and how proceeds are split.

Tax protection for the spouse who leavesIf the decree lets the in-spouse use the home as their main home, the IRS counts that as the out-spouse’s use too, which preserves their $250,000 exclusion at the eventual sale.

Credit exposure for the spouse who leavesThe joint mortgage stays on their credit report. Lenders can exclude it from their debt ratio only if the other borrower has paid it for 12 documented months with no lates.

Questions people ask on this page

Can I keep the house and the 3 percent mortgage?

Sometimes. A HELOC for the buyout keeps the first loan in place but leaves your spouse on it. An assumption keeps the rate and can release your spouse, but the servicer has to approve you and many conventional servicers will not. FHA and VA loans are assumable with approval. How assumptions work.

What if I cannot qualify alone but my parent can co-sign?

Some lenders allow a non-occupant co-borrower on a refinance. Your attorney needs to know before the decree sets a deadline, and your co-signer needs to understand they are on the hook.

What if my spouse refuses to sign the buyout?

The court can order it. Once you have a written valuation and a pre-approval, a buyout at a fair number is hard to argue against. The stronger your paperwork, the shorter the fight.

Who pays the mortgage while we figure this out?

Whoever the temporary orders say. Until then, usually whoever has been paying. A missed payment during the case hits both credit reports. Protecting your credit during the case.

Should I keep a house I can barely afford?

Honestly, usually not. A payment that eats half your income leaves nothing for repairs, retirement or a bad year. We will tell you that if it is true, and so will a good attorney. Sometimes the right answer is to sell, rent for a year, and buy something you can carry. Buying again on one income.

Lender note. Rate examples use the Freddie Mac 30-year average of 6.95 percent (September 17, 2026) and are illustrations, not offers. Mike Oswald, VP of Mortgage Lending at Rate, NMLS 261003, is an independent lender we work with. You may use any lender you choose; we receive nothing for the referral.

Keeping the House in a Colorado Divorce: Buyout, Refinance and the Deadline

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Plain-language education, not advice. Divorce Decisions is published by The Kenna Real Estate Group at Keller Williams DTC, a real estate team. Nothing here is legal, tax, lending or financial advice, and reading it does not create any professional relationship. Colorado law and lender rules change; confirm anything that matters to your case with a licensed Colorado attorney, a tax professional, and your lender. See our full disclaimer.

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