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Buying Out Ex or Partner Is Not a Purchase; It’s a Rate/Term Refi

We were just asked if an RPA (Residential Purchase Agreement) is needed when a man buys out his ex-wife (who is on title with him).

The answer is no.

Whenever a person buys out a spouse or partner who is on title, lenders consider the transaction a “rate and term refinance,” as long as all net proceeds go to the partner who is getting bought out and deeding off title.

The “rate and term” refinance (instead of a “cash out” refinance) is an important distinction b/c it allows for much higher loan-to-value ratios and better rates.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646