Dividing Mortgage and House: Who Gets the House?

Dividing Mortgage

Child custody and property are the two biggest pillars of divorce. As for the family home… This is the battleground where they meet, head-on. 

Not only does a house function as the physical structure keeping your children out of the cold, but it’s also often the single biggest investment that a couple makes during their marriage. So, between memories and money, there’s a lot to fight for within these four walls. 

Which means the answer to the question, “Who gets the house?” is a pretty important one. 

In this article, we’ll talk about the laws of community property, what they mean, and how they might affect who gets the house in your divorce.  

Community Property and the Family Home

Unfortunately, there’s no set formula for determining who gets the house in a Texas divorce. Which, of course, also means there’s no set answer to this question, either. Instead, the answer will come down to how the rules of community property end up interacting with the facts of your situation. 

But what is community property, exactly?

Community property is one of two ways to divide marital assets into the United States (with the other being equitable distribution). Under community property, anything that either spouse collects while married—be it a house, land, jewelry, art, loans, credit card debt, bitcoin, retirement account, or lottery tickets—belong to both spouses equally (regardless of whose name it’s in).

In contrast, assets received before or after marriage are considered separate property, and will (theoretically) leave with whichever spouse they entered the marriage with. In Texas, inheritances, gifts, and awards for claims of personal injury are also considered separate property.

While these distinctions might sound clear-cut, they can actually get pretty complicated, especially if the house in question spans the years both before and after a marriage. 

Here’s a closer look at what we mean.

1. The House Was Purchased Prior To Marriage

If everything you bring into marriage with you is considered separate property, then a house purchased prior to tying the knot should belong to you outright, when you divorce, right?

Under certain circumstances, this might be true. For instance, if you bought the house and paid it off before getting married, and never even lived in it, once you were. But there are still a lot of pitfalls with this scenario.  

Short of a valid prenup, anything you acquire while married belongs to both of you equally—and that includes paychecks. Hence, if you’re paying off the mortgage, doing upgrades, and paying taxes with marital money, there’s a good chance the home no longer belongs to you, outright, anymore.

In this scenario, whatever percentage of marital assets that were invested into the home will need to be divided as marital property, before the rest can be claimed as separate.

2. The House Was Purchased During Marriage

In contrast, a home purchased while married, with marital assets, and for the benefit of the marriage is a much easier scenario. 

Here, the most likely outcome is that the house belongs to both of you, equally, and will need to be divided alongside other marital assets. However, if any repairs, upgrades, or mortgage payments were made using separate property, then the court will likely subtract that value from the pot, first. 

3. The House Was Purchased After Marriage

Most post-marriage purchases aren’t going to affect your ex-spouse (or their rights). In the eyes of the law, you are no longer a single entity, so the investments and acquisitions either of you make afterwards won’t affect the other. 

The only way you might have a claim to a property your ex purchased after marriage, is if the court discovers previously undisclosed assets. In that case, there’s a good chance the court would have to throw out your original order, and reassess the property division, which could impact that new home.

Another potential pitfall is if either of you purchase a home while separated. The Texas Family Code does not recognize legal separation. Hence, even if you weren’t living together at the time (and never get back together afterwards), your new house would still be considered marital property. 

Bottom line? The best way to avoid hiccups in this scenario is to avoid making big purchases until your divorce is legally finalized. 

How to Divide the House? 

The simplest and cleanest option is for couples to sell the house, set aside whatever value is delegated as separate property, and divide the remainder along with the rest of the marital property. However, many clients are not keen on that option, either because of emotional attachments, or because they still have kids at home.

If children are involved, judges will often try to award the house to the custodial parent, since they will be the ones providing the child’s primary residence. (And because, of course, it’s a much easier transition for the kids.) 

When one spouse (let’s call him Spouse A) keeps the house, then the other (let’s call her Spouse B) will need to be compensated for her share of the value. This is typically done in one of three ways: 

  1. Spouse A buys out Spouse B’s value in the home. 
  2. Spouse B is awarded other marital property that’s of the same value. 
  3. Spouse A refinances the home solely in his own name, and gives Spouse B her share of the value. 

Don’t let memories cloud your better judgment, though. Before you die on the molehill of keeping the house “for the sake of the kids,” it’s important to first consider your finances.

Consider Your Finances

Part of keeping the home should include an honest assessment of where you’ll be at, once you’re divorced. Will you be in a position to make payments? Ensure its upkeep? Save for rainy days?

In some cases—even when the judge is willing to let you keep the home—it might make more sense to move to something more affordable. At the end of the day, it’s more important to have financial stability for your children than to hold onto something for sentimental value.

What About the Mortgage?

Generally speaking, Texas courts will try to hitch any marital debt with its respective benefit. Hence, if Spouse A is keeping the house, then there’s a good chance Spouse A will also get the mortgage. 

However, keep in mind that this won’t release Spouse B from liability on any remaining mortgage payments. 

While the court might have the power to award Spouse A the house, unfortunately, they do not have the authority to change the terms of a valid contract with a lender. The only way to dissolve this liability will be to: 

  1. Refinance the home under a new loan. 
  2. Request a loan assumption from the lender. 
  3. Request a loan modification from the lender. 
  4. Sell the house and split the proceeds.

Your attorney can help you decide which of these options is right for your situation. 

Once Spouse B’s name is off the mortgage, they’ll also need to take their name off the home’s title by filing a quitclaim deed.

Divorce Attorneys in Texas

Your family’s home represents a significant investment of time, money, love, and dedicated care. So it’s completely understandable that you want things done right when you get divorced. 

Whether you want to keep the house, or simply want to ensure you get your fair share, we want to hear from you. Call the North Texas Family Lawyers team today at (972) 402-6367, or schedule a consultation online, and let us help you answer the question, Who gets the house? in your Texas divorce.

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