When a married couple in Texas chooses to end their relationship, they may have to decide how to split the marital home. This is not always an easy decision for a Texas couple to make as each partner could have an emotional attachment to the house. By asking the right questions, it’s possible to make an educated decision about what to do with such an asset.
In many cases, having a deal in place to refinance the mortgage into one person’s name can make it easier to come to a full divorce settlement. However, the person who will own the home after the refinance is complete will need to be able to qualify for a loan on his or her own. It will also be necessary to determine how much the other person will receive in a buyout and what the interest rate on the new loan will be.
The loan amount that an individual qualifies for may have an impact on how a buyout is structured. Prior to deciding whether to sell or refinance a home loan, be sure to know how much equity is in the house. Equity is the amount left over after subtracting the current mortgage balance from how much the home is currently worth.
Most marital property, including the home, can be divided in a divorce. Someone who wishes to keep the marital home might need to buy out the other person. Alternatively, an individual could provide other assets equal in value to the other spouse’s interest in it. An attorney could help a client structure a settlement that is in his or her best interest. If a couple has children, their interests will need to be protected in a settlement as well.