Legal Question in Real Estate Law in California

If you can get a refinance in your name only with both of you on title to the house, go for it. Odds are, however, that you would have to take her off title before a lender would loan to you alone. Also, most lenders do not give their best rates to married people taking out separate loans, because they know there is some reason for it, so you may not get as good a rate as you think and some lenders won't even do it unless it is investment property.

The first thing you need to do is find out from a good mortgage broker what exactly you would qualify for if the house was in your name only and you took out the loan alone, versus the house in both names taking it out together, and whether anyone will loan to you at all with both on title and you taking out the loan in your name only (highly unlikely unless the loan will be less than 50% of the total value of the house).

If you really will get that much better rate with you alone on title and the mortgage, then you need to protect your wife carefully unless you want her to be screwed over in case of divorce or your death. Assuming that is not your intent, you will need a post nuptual agreement that the change in title is not intended to change the community property character of the property. You will need a will, since the property will no longer automatically pass to her on your death, and you should also take out a life insurance policy that will pay off the loan should you die.

Institutional lenders do not loan money secured by a deed of trust signed by one spouse in California. The reason that they do not do this is that the nonconsenting spouse can set aside the encumbrance. They will want one spouse to transfer title to the spouse encumbering the property. This is a bad idea for the spouse transferring, and has significant effects on estate planning.