Short Answer

To refinance and buy out the other owner you typically: 1) agree on a buyout price (or get a court order), 2) arrange a refinance or cash loan in your name, 3) use the new loan proceeds to pay the co-owner, 4) record a deed transferring the selling owner’s interest, and 5) get lien releases and updated title insurance. Lenders, taxes, closing costs, and possession/occupancy questions affect timing and outcome.

Step-by-step Process

1. Confirm ownership and existing debt. Start by pulling the deed and the mortgage payoff statement. Check whether the mortgage and deed list both owners. If both names are on the mortgage, a refinance is usually required to remove the departing owner’s liability.
2. Agree on price or value. The buyer (the owner who will keep the property) and the seller (the owner being bought out) should agree on a buyout number. Common methods: a professional appraisal, a broker price opinion, or negotiated figure based on recent sales. If you cannot agree, a partition action may force sale or division under Virginia civil procedure law (see Virginia Code Title 8.01 for partition actions: https://law.lis.virginia.gov/vacode/title8.01/).
3. Decide how to fund the buyout. Typical options:
   • New mortgage in buyer’s name (refinance of the property).
   • Cash from buyer’s savings or a personal loan.
   • Seller financing: the departing owner takes a promissory note and deed of trust from the buying owner.

   A cash-out refinance or a new purchase/refinance loan are common when the buyer needs mortgage proceeds to pay the seller.

4. Apply for the refinance or loan. The lender will vet the buyer’s credit, income, assets, debt-to-income ratio, and the property’s value (appraisal). Virginia lenders may require proof of clear title or payoff of subordinate liens before closing.
5. Get a payoff statement and clear subordination issues. Obtain payoff statements for any existing mortgages or liens. Ensure homeowners association dues, tax liens, or judgment liens are addressed before or at closing.
6. Prepare a written buyout agreement and deed. Document the transaction. Typical documents include a purchase agreement between co-owners and a deed (usually a general warranty deed or quitclaim deed) transferring the departing owner’s interest. The deed must be signed and notarized and then recorded in the county land records.
7. Close the refinance and the buyout. At closing, the new lender funds the loan, the seller receives buyout funds, and you record the new deed and mortgage. Ask the settlement agent for payoff receipts and confirmation that the departing owner is released from debt obligations if their mortgage liability is being removed.
8. Record documents and update title insurance. Record the deed and new mortgage with the local clerk/recorder. Order an owner’s title insurance policy in the buyer’s name and obtain a lender policy if required. Confirm releases of any paid-off liens are recorded.
9. Address taxes and transfer recording fees. Virginia imposes recordation and grantor’s taxes on real estate transfers in many cases. Check the Virginia Department of Taxation for recordation taxes: https://www.tax.virginia.gov/real-estate-recordation-taxes.
10. Obtain written release of liability. If the departing owner was previously on the mortgage, the only reliable way to remove their liability to the lender is for the lender to issue a release (often by approving the refinance). Get written confirmation that the departing owner is no longer liable for the mortgage.

Common Lender Requirements and Practical Issues

• Credit score and income: the refinancing owner must qualify on their own for the new loan.
• Appraisal: lenders usually require an appraisal to determine market value and allowable loan amount.
• Loan-to-value (LTV): the amount you can borrow depends on the LTV the lender allows.
• Closing costs and prepayment penalties: factor in fees, origination costs, and any penalties on existing mortgage payoffs.
• Timing: coordinate payoff dates, recording, and release of liens to avoid double liability during the transition.

When You Can’t Reach Agreement

If co-owners cannot agree on price or terms, a partition action is an available remedy in Virginia. A court can order either a physical division of the property (rare for houses) or a sale with proceeds divided among owners. See Virginia Code Title 8.01 for the civil procedure that governs partition suits: https://law.lis.virginia.gov/vacode/title8.01/.

Checklist: Documents and People to Involve

• Deed showing current ownership (recorded deed).
• Mortgage payoff statement(s).
• Appraisal or valuation report.
• Written buyout agreement or purchase contract between owners.
• Settlement agent or closing attorney (many Virginia closings use a title company or attorney to handle settlement).
• Title company and updated title insurance policy.
• Proof of payment and recorded releases for any liens.

Helpful Hints

• Get an independent appraisal early. It prevents disputes about fair value and speeds lender underwriting.
• Ask the lender what documents they require to remove a co-borrower from the mortgage—different lenders have different rules.
• Consider whether a temporary promissory note from buyer to seller (seller-financing) could bridge timing if the buyer needs time to refinance.
• Keep written records of every payment, payoff, and signed document. Recording the deed promptly protects ownership rights.
• Check local county recording fees and whether any local transfer taxes apply, beyond state recordation obligations (state guidance: https://www.tax.virginia.gov/real-estate-recordation-taxes).
• If the departing owner refuses to cooperate, learn about partition actions under Virginia law: https://law.lis.virginia.gov/vacode/title8.01/.
• When a mortgage remains in the departing owner’s name because a refinance is impossible, the departing owner remains financially liable until the lender issues a release—plan for this risk.