How to Remove Your Spouse from a VA Home Loan

Getting divorced or separated can be an emotionally difficult time. On top of that, there are many legal and financial details to work out. One of those details is what to do if you and your spouse have a VA home loan together.

Luckily, there are a few options for removing your spouse from a VA mortgage. This article will walk through everything you need to know about taking a spouse off a VA home loan.

Can You Remove a Spouse From a VA Mortgage?

The short answer is yes, you can remove a spouse from a VA home loan.

The most common way to do this is through refinancing the mortgage into just one spouse’s name. This can be done through a VA streamline refinance known as the Interest Rate Reduction Refinance Loan (IRRRL).

According to VA guidelines, IRRRL refinances must provide some type of benefit to the borrower such as a lower interest rate or lower monthly payments

There are a couple restrictions to be aware of

• The VA does not allow lenders to issue VA loans to non-military borrowers. So the non-military spouse cannot get a VA IRRRL on their own unless they are the surviving spouse of a deceased veteran.

• State laws may impose additional restrictions on removing a spouse from a mortgage.

VA Loan Rules vs State Laws on Property Ownership

When a legally married couple gets any type of mortgage together, state community property laws come into play. These laws determine legal responsibility for debts and how property is divided if the couple divorces.

Community property laws vary quite a bit by state. And they affect how you can remove a spouse from a VA loan. VA guidelines do not override state laws on community property.

It’s important to look up the laws in your state before taking action to remove a spouse from a mortgage. Or, consult with an experienced real estate attorney in your state.

For unmarried co-borrowers, community property laws usually don’t apply unless you have a common law marriage recognized in your state.

Refinancing a VA Loan in One Spouse’s Name

As mentioned above, the most common way to remove a spouse from a VA loan is to refinance the mortgage in one spouse’s name only. This can be done through:

• VA Streamline Refinance (IRRRL) – Best option in most cases. A simple process with low costs.

• VA Cash-out Refinance – Allows you to tap home equity. More complex than IRRRL.

A key requirement is that at least one borrower, spouse, or dependent child must occupy the home.

If the non-veteran spouse will keep the home, they may be able to refinance into a conventional loan. This removes the veteran’s name and entitlement from the property.

Using a VA Loan Assumption

Another option is a VA loan assumption. This allows a non-veteran to assume responsibility for an existing VA mortgage.

With a VA assumption, the original borrower is released from the loan. The new borrower takes over mortgage payments but keeps the original loan terms.

A VA assumption works for:

• Divorcing spouses – The non-military spouse can assume the loan and keep the home.

• Unmarried co-borrowers – One borrower wants to stay on the loan, while the other wants to leave.

The assuming borrower must be approved by the lender and qualify financially for the mortgage.

Key Considerations When Removing a Spouse

Here are some other key things to keep in mind when removing a spouse from a VA loan:

• Refinancing or assumptions won’t change the property deed – You’ll need to file a separate quitclaim deed to change ownership.

• Get clarity on release of liability – Make sure you fully understand when and if you will be released from the mortgage.

• Consult an attorney – Get advice on state laws, title changes, and liability issues. Don’t rely solely on lender info.

• Check credit impacts – Removing a spouse from a mortgage may negatively or positively affect credit scores.

• Consider timing – It’s often best to wait until after the divorce is finalized before refinancing.

Steps to Remove a Spouse from a VA Mortgage

Follow these key steps if you need to remove your spouse from a VA home loan:

1. Research state property laws – Understand how divorce and ownership issues are handled in your state.

2. Talk to your lender – Ask about the refinance or assumption process and paperwork needed.

3. Consult an attorney – Get advice on the best options and pitfalls to avoid based on your situation.

4. Check your VA entitlement – Make sure you have enough entitlement to refinance if needed.

5. Apply for the new loan – If refinancing, go through the application and approval steps.

6. Complete the real estate paperwork – Sign your loan documents and new deed if applicable.

7. Finalize the divorce – Wait until the divorce is final to finish the process if possible.

8. Notify your servicer of changes – Let them know your loan was refinanced or assumed by your spouse.

Alternatives to Removing Your Spouse

There are a couple other options if removing your spouse from the loan isn’t possible or preferred:

• Sell the home and split proceeds – This gives you both a clean break from the property.

• Transfer ownership but stay on loan – Quitclaim deed the home but still pay the mortgage temporarily.

• Temporary occupancy agreement – One spouse moves out but still pays toward the home.

Discuss these alternatives with your lender and attorney to see if they may work better for your situation.

Getting Professional Help with a VA Mortgage

Trying to remove a spouse from a VA loan on your own can be extremely complicated.

Get help from these professionals to make the process smoother:

• VA-approved lenders – Can explain your specific loan options and how to apply. Veterans United is the nation’s #1 VA lender and a great source of expertise.

• Real estate attorneys – Provide guidance on state laws, ownership rights, title changes, and liability.

• Divorce lawyers – Help negotiate mortgage issues and ensure a fair outcome for both spouses.

• Financial advisors – Give advice on the budgets, assets, credit, and taxes involved.

Lean on the experts so you can focus on healing and moving forward during this difficult transition in life.

Removing a Spouse from a VA Loan – Key Takeaways

• You can remove a spouse from a VA loan through refinancing or loan assumption.

• State community property laws affect how this process works.

• Consult an attorney and lender to understand your options and liability.

• Refinancing into a VA streamline IRRRL is often the simplest route.

• Make sure your VA entitlement is restored when needed.

• Get help from professionals to deal with the legal and financial complexity.

While ending a marriage is emotionally draining, removing your spouse from a VA home loan is a important part of a new start. Take it step-by-step and get support to smoothly handle all the mortgage-related challenges.