Legal Question in Real Estate Law in California

This is largely a matter of lender policy, not California law. However, under California law, since we are a community-property state, lenders are aware that a spouse can develop a small interest in the other spouse's separate property, so typically the lender will require the non-owner spouse to execute a quitclaim deed to the title-holder spouse.

The spousal interest arises because earnings of either spouse during marriage are generally community property, and when principal payments are made with community-property earnings, the community, and hence the other spouse, gradually builds up what is called a "pro-tanto interest" in the property.

Refinancings such as the one you're planning are quite common and an experienced lender should be able to handle the paperwork without blinking.