How to calculate a house buyout in a Colorado divorce (worked example)

Step 1: the value

A written valuation both spouses accept, or an independent appraisal that the agreement says controls. How to get one.

Step 2: the equity

Value minus every loan against the house. Some agreements deduct estimated selling costs (about 7 percent) because the leaving spouse gets cash now and the staying spouse gets an illiquid asset; others do not. Decide explicitly.

Step 3: the share

Half is common but not required; Colorado divides equitably. A premarital-house claim reduces the marital equity to the growth since the wedding.

Step 4: how to pay it

• Refinance: new loan of payoff plus buyout. Fannie Mae treats it as a limited cash-out refinance if the house was jointly owned 12 months, allowing up to 95 percent loan-to-value.
• HELOC: keeps the low first mortgage; the other spouse stays on it until released.
• Other assets: retirement, savings, a second property, valued after tax.

Step 5: can you qualify?

PITI of about $3,870 on the refinance example needs roughly $108,000 of income at a 43 percent debt ratio with no other debt. Support counts with six months of receipts and three years of continuance. Get pre-approved before the deadline is written. Keep the house, and Mike Oswald at Rate for the real numbers.

Plain-language education from a Colorado real estate group, not legal, tax or financial advice. Numbers are as of September 2026. Disclaimer.