Divorce is never easy, and dividing marital properties between the spouses can make it even more difficult. In Weatherford and the rest of Texas, the courts encourage couples to come to an agreement on a fair division of their property. If the spouses can’t agree, the District Court will decide for them based on what the judge deems to be fair.
One of the most potentially contentious property splits involves the marital home. There are several things to consider here, including the spouses’ equity and outstanding debt. According to Texas laws, spouses share the property’s equity and debt equally.
If you’re going through divorce, you and your spouse have two basic options on how to divide your marital home: selling the property or deeding it to one spouse.
Selling the marital home
This process typically starts with getting the home assessed to determine its value. The property is then put on the market, and once sold, the mortgage on the home is paid and the remaining equity is split equally, or as mutually agreed upon, by you and your spouse. With this approach, you and your spouse are both relieved of the debt on the house, and you both get a fair share of the profit.
However, this means that you have to find a new place to live. If children are involved, this can add to their burden as it could mean another major disruption in their lives in addition to the divorce.
In many cases, the spouse who gets custody of the children is given the option to stay in the house. The spouses may agree that the person who gets to keep the home “buy off” the other’s equity on the property, perhaps by giving up all or part of their equity on other marital assets. The spouses may also agree to continue sharing the equity and debt on the home even as one of them leaves it.
If you’re the party who gets to keep the home, your spouse may sign a Special Warranty Deed that essentially gives you sole ownership of the property. This leaves you, however, with the responsibility of paying off the property’s remaining mortgage.
To remove your spouse’s name from the loan, you will need to have the home refinanced. If, for some reason, you cannot obtain refinancing, your spouse will continue to be liable for the mortgage even when they have given up their interest in the home.
For your spouse’s protection, they might ask that you sign a Deed of Trust to Secure Assumption. Essentially, this states that you will continue to pay off the mortgage until you can get refinancing. If you’re unable to refinance the property and miss on monthly mortgage payments in the future, your spouse can foreclose upon the home. They can then choose to buy the property back and have it refinanced on their own, essentially removing you from the ownership of the home.
Moving forward from divorce
Going through divorce and moving on with your life can be fraught with difficulties. In attending to your real estate needs, working with trusted real estate companies in Weatherford, TX can ease the burden by giving you one less thing to worry about. We at HBS Real Estate can help in assessing the value of your property or finding a new home for you. Call us at 817.550.6666 or leave us a note here.