For many married couples, the marital home is their biggest asset. Thus, not paying sufficient attention to this asset during a divorce proceeding can be a major mistake. Refinancing following divorce in Texas may be beneficial for a couple of reasons.
First, refinancing can help to protect the credit of the spouse who has chosen to give up the home and take a share of the home’s equity instead. This is important because in the lender’s eyes, the spouse who no longer lives in the home is still liable for the mortgage unless the home is sold, the mortgage is paid off or the home is refinanced in the other spouse’s name. Coming off of a home’s title is not the same as coming off of its mortgage.
Second, when it comes to buying out a spouse for the home, this can happen in several ways. For example, the spouse who wishes to keep the home can give up other assets whose value is equal to that of the house. An alternative option is for the spouse who wants to keep the home to give up receiving spousal support from the other, higher-earning spouse.
If two spouses can find common ground when dealing with the family home, they can avoid going to divorce trial, which can be stressful and costly. Instead, they can sort out their issues at the negotiation table, which is not as high pressure and can be more amicable. An attorney in Texas can provide guidance during negotiations to ensure that one’s rights and best interests are protected when tackling asset division.
Source: forbes.com, “Til The House Do Us Part: The Top Five Reasons To Refinance After Divorce“, Jason Crowley, Nov. 27, 2017