Splitting up assets is a major part of the divorce process. From small personal items such as dinnerware and books to large-ticket items like vehicles, all shared property must be dealt with. Even when a split is amicable, divorcing couples in Texas often have trouble deciding how to handle what is typically their biggest and most valuable asset, which is their home. When it is burdened by a mortgage, it can be even more difficult.
Typically, there are two ways to deal with a mortgage during the end of a marriage, each of which require the cooperation of both parties to ensure a smooth resolution. Couples first must decide if it’s in their best interest to sell or refinance. This is a deeply personal choice that is dependent on many factors, including whether or not minor children live in the home and the mortgage amount that was paid off during the marriage.
If an individual decides that they wish to remain in the house following the termination of marriage, the mortgage must be refinanced solely by that person, and the other party must sign a quit-claim deed. Many individuals find that, following a divorce, they no longer qualify for refinancing as they have only a single source of income to work with. Thus, in many cases, divorcing couples will take what is known as the ‘equity route,” or selling the house and splitting the equity minus any outstanding mortgage balance.
Those tasked with the often monumental job of dividing assets due to divorce or separation may have many questions. A qualified family law attorney may be able to offer advice to a divorcing client on the best ways to handle property division amicably and can serve as a neutral party during this emotional time.