Many couples in Texas struggle with dividing their residential property amicably while negotiating a divorce. Buying a spouse out of the property may prove to be difficult if both parties can’t agree on terms due to individual equity and debt agendas. However, there are several strategies that many divorcing spouses have used.
People who have yet to officially separate or divorce may experience problems obtaining a new mortgage without the cooperation of the ex-spouse. The vacating party may need to sign a quitclaim deed in order to release their interest in the property and be clear of potential complications in the future. In some cases, the judge may award the home to a spouse who is unable to qualify for a new mortgage that refinances the ex-spouse out of the contract. Divorcees are often considered to be jointly liable by creditors if their name is still attached to the property.
Some people have had their credit rating negatively impacted because of a former spouse’s inability to make current payments on an account still considered to be joint. Aside from the divorce decree, the only ways to completely dissolve any interests or liability to the property would be by refinancing the mortgage and removing the name or selling the home. Doing so can help improve the debt-to-income ratio when the time comes to purchase new property in the future.
People who have yet to enter divorce or establish a legal separation agreement, may benefit from meeting with legal counsel as early as possible. A divorce lawyer might be able to provide guidance and insight than can help potential divorcees avoid making mistakes that can have long-term ramifications after the marriage is terminated.
Source: credit.com, “How to Divide Your House in a Divorce“, Scott Sheldon, July 09, 2014