When people in Texas decide to divorce, they may face a challenge in determining how to handle the marital home. Texas is a community property state; in most cases, each spouse would be entitled to an equal share of the property. Even so, deciding how to evaluate the property in the divorce can be difficult. In the first place, it is important to determine the amount of equity that the couple has in the home.
If the couple has only a small amount of equity, both parties may decide whether one person wants to remain in the home. If so, that person could “buy out” the other party through an alternative distribution of marital assets; for example, the other spouse could receive an equivalent amount in a retirement fund or other asset. The transfer of title is fairly simple for most homes owned jointly; one spouse could sign a quit claim deed to the other. However, this is not sufficient to remove that spouse’s obligation to pay the mortgage.
In order to make sure that the transfer is truly final and that the other spouse is no longer bound to a mortgage on a home without a matching ownership interest, it is necessary to refinance the mortgage. Spouses who want to keep the home should make sure that they are eligible for a mortgage on their own before making a firm decision. It can also be advisable to get a home inspection and otherwise treat the transfer as a home purchase.
Of course, both parties could also decide to sell the home and split the proceeds; for many couples, this could be the best choice. A family law attorney may work with a divorcing spouse to provide advice and representation on real estate issues and other divorce matters, working to achieve a fair settlement.