The question of who gets to keep the house in a Texas divorce is difficult to agreement on, as it is not just property subject to the Texas ‘just and right division’ of community property. Instead, it is your home that you have lived in, that has sentimental, and emotional attachment. Further, the house is not only a sentimental investment, but a financial investment.
What considerations and factors are there in order to keep your house after a divorce? First, you can always come to an agreement with your spouse whereby you may keep the house. If there is no agreement, your attorney will work on dividing all assets. If no agreement can still be made, then a judge can divide all assets and liabilities in a fair manner. However, it is encouraged that both spouses work together to reach a settlement without court intervention as you both are in the best position to decide how to divide the property.
Is refinancing necessary? The marital home may be the biggest liquid asset from the marriage and in such case, refinancing is a good option. However, if it is not the biggest liquid asset or if you do not have any other asset(s) that can add up to 50% of the total equity, then refinancing is not a good option. Equity means the total dollar amount that has been paid for the house, not the total value of the house and does not include what is owed to the mortgage company. Another way of calculating equity is taking the total value of the home less the total amount owed. This value is divided equally 50/50 to each spouse, unless your situation necessitates an altered division in some fashion or another.
Refinancing will take your spouse’s name off the title to the house and allowing you to profit on any equity. You can also give your spouse their share of the equity and use your share as a down payment to lower your new monthly mortgage. You essentially would be getting rid of the old mortgage company as it is based on both spouse’s credit scores and giving it to the new mortgage company based on your own credit score. It is highly advised to start the process of refinancing early so that you are able to get a different lender who will approve you instead of waiting until either your credit scores improve or having to apply with several different lenders to find one that will approve your application. Further, your final decree will need to include language that you are refinancing the home. This does not guarantee, however, if you will be able to refinance.
What about a quitclaim deed? Quitclaim deeds on the other hand do not resolve refinancing issues. Quitclaim deeds only take your spouse’s name off the title so they are no longer the owner of the home with no legal rights. However, if your spouse’s name is still on the mortgage, he/she will still be responsible for all mortgage payments even if you fail to pay the mortgage payments as required. That is, a quitclaim deed does not dissolve your spouse’s liability for mortgage payments or missed mortgage payments.
Your home is not only where all your memories live, but most likely the biggest financial investment and biggest asset. It is highly advisable to always contact a qualified attorney to help you reach the best outcome possible.
About the Author: Mala Sharma has been practicing family law and personal injury with her family at the Law Offices of Sharma & Associates, founded in 1997 with over 42 years of combined experience. Mala is a Board of Advocates for the Houston Trial Lawyers Association, Vice-Chair of the American Bar Association GP Solo YLD, member of the Houston Bar Association, President Emeritus of the Houston Northwest Bar Association, and prior board member of the South Asian Bar Association.
This material is available for informational purposes only and not for the purpose of providing legal advice. If you require advice on any particular legal question, you may contact Sharma & Associates at 281-893-8644 or by email at firstname.lastname@example.org to schedule a free consultation to discuss your case.