You will also have to deal with the timing of the buy-out in relation to the divorce. Ask you divorce attorney about this. The paperwork may say he is no longer obligated to repay the existing mortgage, but the reality is that the original mortgage documents exist, and as you suspect, only a re-finance will clear the existing mortgage from his name. His homestead rights will likely be extinguished by the decree, but timing is important. You need your attorney's advice on when in addition to a loan officer's advice on how.