Dividing the equity in a home during a divorce can be a complex process, particularly in Texas. Texas has unique home equity laws that restrict cashing out more than 80% of the home's value. This can pose challenges when attempting to divide home equity in a divorce. While online divorces or DIY approaches may seem convenient, it's important to be aware of potential problems, especially in Texas where divorces can be more complicated than in other states. At times like these, coping with divorce can be difficult, which is why we're here to provide you with the information you need to make the process as smooth as possible.
The Richard Woodward Mortgage Team specializes in mortgage issues related to divorce and is certified and experienced in handling such matters. We understand Texas law and how it impacts both parties involved in a divorce. Our expertise allows us to assist you in accessing up to 95% of the home's equity, even when big banks and online lenders may claim it's not possible. We can do this with an Owelty Lien that can be prepared by our title companies if you don't already have one prepared. Additionally, we can offer guidance and connect you with divorce lawyers if needed.
Disclaimer: We are not attorneys and cannot provide legal advice on divorce law. However, we can consult with you regarding mortgages, proper division of home equity, and obtaining pre-approval for a divorce equity settlement.
Divorce and Mortgages: Essential Information You Should Know
The mortgage on your house is typically the largest liability that needs to be addressed during a divorce. Dissolving this mortgage isn't a simple matter, and the divorce decree is just the beginning. In the eyes of the mortgage lender, both parties remain jointly liable for the mortgage unless specific actions are taken, such as selling the house, one spouse assuming the mortgage, or refinancing the current mortgage to remove the departing spouse from the obligation.
Even if your divorce decree states that one spouse will assume responsibility for the mortgage, it does not absolve the other spouse from their liability. When both spouses signed the original mortgage documents, they agreed to be jointly responsible for repaying the loan until it is fully paid off. This means that if the retaining spouse keeps the home but fails to make mortgage payments, both parties will suffer negative credit consequences, as missed payments are reported on both borrowers' credit reports.
The equitable distribution of home equity in a divorce necessitates that the retaining spouse qualifies for the home and the division of equity independently. Therefore, before a lawyer drafts a divorce decree to divide the equity, both parties should consult with a certified divorce lending specialist. Richard Woodward, a licensed loan officer, shared his experience, stating, "I have encountered numerous individuals who completed an application to refinance the marital property, as required by the divorce decree, only to discover that they don't qualify. This realization occurs 90 days after the final divorce decree has been signed, potentially leading to contempt of the divorce decree, resulting in fines or even jail time."
If you're considering searching for divorce papers online or opting for an online divorce, I recommend visiting Texaslawhelp.org or Texaslegal.org. These resources provide 5 Must-Know Facts About Divorce In Texas. Even in cases where divorce proceedings are amicable, dividing marital assets requires careful planning and expertise. Please feel free to contact us at (214) 945-1066 or use the form below if you have any questions. We're here to assist you throughout this process.
