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We Can Buy Houses During Divorce
Going through a divorce is difficult, and the situation becomes even more complicated when it comes to the marital home you shared together. Because the state of Texas is a community state, the shared property must be divided equally. However, there are many factors which determine if the shared home should be sold, or one spouse remains living in the house.
As each case is different, you should consult with your own divorce lawyer. However, below are some common questions and general answers on what happens to the shared home during a divorce.
How can AMI House Buyers help if you are going through a divorce?
If you and your spouse are divorcing and agree to sell your shared home, or are court-ordered to do so, we can make you a cash offer and cover your Seller's closing costs. This allows you to sell your home quickly, so you both can divide the proceeds and move onto the next chapter of your lives while avoiding the hassles, fees, and time it can take to sell your home on the market.
Selling During a Divorce Related FAQs
You’ll find a list of the frequently asked questions we receive from homeowners in general here. You'll find a list of divorce specific frequently asked questions below.
Disclaimer – The information on this page is intended for general informational purposes only and not to provide legal advice.
What happens to a house during divorce?
Texas is a community property state, meaning that assets acquired during the marriage are owned equally by both spouses, including their biggest asset, which is most likely their house.
All community property must be divided during a divorce, as opposed to separate property, which is not divisible. Separate property includes anything a spouse owned before the marriage, and gifts, inheritances, or personal injury settlements received during the marriage.
If a spouse provides evidence that the house was purchased before the marriage, received as a gift or inheritance, or bought with separate assets, then it would likely be considered separate property, and only that spouse would be entitled to the home in a divorce.
During a divorce, what are the options on what to do with your home?
When a couple is divorcing, they can come to an agreement on their own, or have the court decide on their behalf, whether one spouse remains living in the house, or that the house is sold, and the proceeds from the sale would be split. This decision is dependent on a number of factors, including if the couple has children together and which parent would be granted primary legal custody, and if one spouse would be financially capable post-divorce of making the house payments on their own.
Is it possible to keep a house in a divorce?
Yes, it is indeed possible for one spouse to keep the house in a divorce, but only if they are financially capable of making the house payments on their own. It is strongly recommended that they refinance the mortgage, so the loan is in their name only. The spouse who is not awarded the home would be entitled to other community property to even out the distribution of marital assets; or the spouse keeping the house would need to forgo assets which they may have otherwise been entitled to, such their spouse's retirement benefits.
Another option for one spouse keeping the house is to buy out the other spouse's financial interest in the home. In this case, half of the current equity in the home would be paid to the spouse leaving, through multiple payments made over a specified period.
How is the equity in a house divided during divorce?
If selling the home, the equity the couple has in the house would be split through the proceeds of the sale. If the couple has no children, neither spouse was at fault for the marriage ending, and each spouse has approximately equal financial standing after the marriage, then the equity would be distributed evenly at 50/50.
However, as each case is different, the split would be adjusted based on such factors as each spouse’s income and income potential, if there are children, and if one spouse was at fault for ending the marriage. Once the court determines the percentage of community property that each spouse is entitled to, the court may ask the couple to sell the house to divide its value, or award the home to one spouse and offset its value with other assets and debts. For instance, the spouse who retains the house may be ordered to pay the current equity equivalent in the home to the spouse leaving the home.
What if the house is in only one spouse’s name? Would that spouse be the only one entitled to it during a divorce?
No. In the state of Texas, a house purchased during the marriage is considered community property, regardless of whose name is on the deed. There are exceptions, including if the house was purchased with separate property money, or was an inheritance or gift. It must also be proven that the house was acquired through one of those means for it to be considered separate property.
What happens to the mortgage when you get a divorce?
If you and your spouse are divorcing and you decide to remain in the home, then you would be responsible for the mortgage payments. If you qualify based on your own individual income, it is strongly recommended you refinance the mortgage in your own name. Whatever share of the home’s equity that you are entitled to out of the divorce will come from the refinancing proceeds.
Who is responsible for paying the mortgage during a divorce?
You and your spouse are both held liable for the mortgage payments during a divorce. That is unless you sell the house, one of you assumes the current mortgage, or one spouse refinances the mortgage in their name only.
Even if your divorce agreement states that one spouse will be responsible for the mortgage, in the eyes of the lender, this will not remove the other spouse from the mortgage responsibility. When both spouses signed the original mortgage documents, they agreed to be jointly responsible for the loan until it is paid off.
Can you refinance a house during a divorce?
Yes, if one spouse wants to remain in the house, they should refinance the current mortgage in their name only. The refinancing spouse must be able to qualify for a mortgage on their own because the bank will look at their personal income and assets for mortgage payments. The point of refinancing is to remove the other spouse's name from the mortgage and Warranty Deed to protect both divorcing parties’ credit.
What happens if the mortgage is only in one spouse's name?
If the house was purchased during the marriage, it is considered community property. As community property, all assets and debts acquired during the marriage are joint, unless they fall under the separate property criteria. Therefore, it’s important to consult with your own divorce lawyer on how to legally remove yourself from any liability you may have for the mortgage in your spouse’s name.
What happens during a divorce when the home is facing foreclosure, but the mortgage is in only one spouse’s name?
If only one spouse signs the mortgage, then that spouse is the only person that the bank may pursue for any deficiency judgment after a foreclosure.
What if our home is foreclosed during a divorce, and the mortgage was in my spouse’s name, would it affect my credit too?
The answer is no, it should not. If a home goes into foreclosure, only the spouse whose name was on the mortgage is whose credit would be affected.
My spouse inherited the home we live in as our marital home. Would I have any rights to it in a divorce?
No, if the home was acquired through inheritance, it is considered separate property. Therefore, only the spouse who inherited the house is entitled to it in a divorce.
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