Divorce is difficult enough without discovering that dividing the equity in your home may be more complicated—and expensive—than you expected.
If one spouse wants to keep the family home, Texas lending restrictions and the cost of buying out the other spouse can create significant challenges. And if securing a home equity loan means trading a 2.75% mortgage rate for 7.75%, the additional interest could be substantial.
So, is selling the house your only option? Not necessarily.
Selling a $500,000–$600,000 home in a stagnant market can come with significant costs, including commissions, price concessions, repairs, moving expenses and temporary storage. Those expenses can add up quickly, and purchasing another home—or renting—may create even more financial strain.
There may be another path.
Depending on your circumstances, an Owelty Lien combined with a second-lien mortgage and strategic planning may allow one spouse to retain the home, preserve the existing low mortgage rate and settle the equity owed to the other spouse.
Of course, every situation is different. If both spouses are on the existing mortgage, removing one spouse from the loan obligation may require refinancing. Certain VA and FHA loans may offer assumability options, depending on the loan and circumstances. Similar strategies may also apply when settling real estate in a deceased person's estate.
An attorney is essential for the legal aspects of a divorce, but an experienced mortgage professional can help evaluate financing options and identify potential solutions before you make costly decisions.
Before you sell, refinance or make a major financial decision, explore your options. The right strategy may help you avoid unnecessary expenses and preserve more of the equity you've worked hard to build.
If you or someone you know is navigating a divorce or settling an estate involving real property, I encourage you to consult a knowledgeable lender who understands these situations.
My heart goes out to anyone navigating these difficult circumstances. I hope this information helps you find a path forward.
Jay Atterstrom
📧 [email protected]
📞 (214) 377-0033