Dividing Mortgage and House after Divorce

Dividing Mortgage After Divorce

When it comes to the division of marital property, one of the most common questions we’re asked at North Texas Family Lawyers, is “Who gets the house?” (Not to mention, the mortgage!) 

It’s a fair question, especially when you consider that a house often represents the biggest investment—not to mention the most valuable piece of property—that couple will own during their marriage. (And a mortgage, their biggest source of debt.) 

Like with everything in a divorce, though, this question doesn’t have a straightforward answer. Your ultimate outcome will come down to a number of individualized factors, along with the careful application of the rules of community property. 

Here’s what you need to know about dividing your mortgage and house during a Texas divorce, and how the North Texas Family Lawyers team can help you with this complex process. 

Dividing Mortgage and House: Community Property 101

When you take away all the bells and whistles and hefty price tags, houses and mortgages are just the same as any other piece of marital property. In Texas, this means dividing assets according to the laws of community property. 

Community Property: What’s Mine is Yours 

In a community property jurisdiction, anything that’s acquired during the marriage by either spouse belongs to both equally—no matter whose name is on the mortgage, deed, loan, or check. (In other words, “What’s mine is yours, baby!”) Upon divorce, this jointly held property will be divided equally between spouses. 

On the other hand, anything owned prior to marriage belongs to the spouse who brought it into the union as separate property and will (theoretically) leave with that spouse, upon divorce. (Gifts, inheritances, and personal injury awards are also considered separate, regardless of when they were received). 

That being said, in order for your judge to divide your house and mortgage, they first gotta know what kind of property they’re dealing with.

How to Figure Out What You’re Dealing With

To figure out the scope and breadth of your combined and separate property, your judge will follow these three, basic steps: 

  1. Identify all of your property and debt.
  2. Characterize all of that property as either separate or marital.
  3. Finally, value the property. 

We say “basic,” but honestly, that’s misleading, since there’s nothing basic about these three steps—even for an amicable divorce. 

During this process, it’s quite common for spouses to try and undervalue their property and income, claim more than their fair share of separate property, and overinflate their personal needs, all in pursuit of a bigger cut of marital property.

Characterizing the Family Home

While “separate and marital” might seem like they have some pretty clear-cut parameters (i.e. the day you got married until the day you split up), there’s actually a lot more gray area than you might expect—especially when it comes to something like a house.

For example, consider a house that you purchased prior to getting married. At first blush, this might seem like one of those easy, “separate property/leaves with me upon divorce” kinds of things. However, what happens if, five years and two kids down the road, you use $50,000 of your spouse’s inheritance to do a kitchen remodel? Or if you had the home refinanced at one point in order to invest in your spouse’s business? 

Also, don’t forget, that—unless you have a valid prenuptial agreement—whatever you earn after marriage belongs to both of you (regardless off whose name is on the paycheck). Which means that even if you’re paying your own mortgage with funds for the same career you’ve had since grad school, those funds are no longer separate funds. After you get married, they’re considered marital. Which means that you’re now paying off your separately owned house with jointly owned money. 

Bottom line? Your house might have started out as separate property, but—unless you were careful—chances are it’s probably not anymore. (At least not completely yours.) 

Just how much of that ownership is still yours will largely depend on what kind of paper trail you left behind. 

Scenario 1: You Left a Really Good Paper Trail 

In this first scenario, you left a really good paper trail. You know how much of the property was paid off when you got married. You kept meticulous records documenting exactly where each mortgage payment came from, and who paid for repairs. So, when divorce comes along, it’s relatively simple for your judge to determine that 60% of the home’s value is yours, and 40% belongs to the marriage, as a whole. 

Since half of the marital pot belongs to you, in this scenario these numbers would give you 80% of the home’s total value. 

Scenario 2: The Commingled Property Conundrum 

The problem is, property rarely stays within one, nice, neat category. When two people are married, funds get mixed around, bank accounts combined, and bills jointly paid so often, that sometimes it can be really tough to tell the two apart.

Separate property that has become so mixed up in marital property that the court can no longer tell whose share is what, is considered “commingled property.”  Commingled property—for purposes of property division—is the same thing as marital. 

At the end of the day, keeping detailed, accurate records is the best way to help the court make an accurate classification of your house and mortgage, if you ever get divorced.  

Division: The Final Step


Once the court has gone through all the hullabaloo of identifying, classifying, and valuing all your separate and jointly held assets—including what percentage of the house is marital, and what percent is separate—it’s time to divvy up the hoard. 

When it comes to a house, this is obviously something you can’t just divide into your respective portions and call it a day. And since a house can’t be physically divided, you must divide the value, instead. 

In this regard, couples have several options. Some of these include:  

  • Sell the house and split the profits according to their respective values.  
  • One spouse keeps the house, the other gets other assets to offset the value.
  • Both former spouses keep the house, temporarily. 

If you can’t decide what to do, your judge will likely order the house sold and proceeds divided, since it’s the cleanest and easiest way to ensure each spouse gets their fair share. 

Transferring Ownership

If you are the spouse receiving the home, then you will need to remove your ex from the deed by filing a Special Warranty Deed. If you are not receiving the home, you’ll want to have your name removed from the mortgage. 

Unfortunately, the court cannot order a bank to interfere with a loan, so the only way to do this is to have your spouse refinance the house. The instructions on how and when this refinancing must take place will be included as part of your final divorce order. 

If your spouse fails to complete refinancing within the requisite time frame, then you may need your attorney’s help with post-divorce services.

Divorce Attorneys in Texas

Property division is no walk in the park, and it’s a process that becomes even more stressful when there’s a family home involved. That’s why you need an attorney who not only knows community property but who’s also familiar with how these laws play out 

If you have more questions about how the court handles dividing mortgage and houses during divorce, we want to hear from you. Call us today at (972) 402-6367, or schedule a consultation online, and let us help you get the division you deserve.

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