Dividing property in a divorce is rarely a simple process, and dealing with a house is no exception. If one person in Texas plans to buy out a spouse and keep the home, there are several considerations to keep in mind.
First, it is necessary to determine how much equity each person has in the home. Next, an appraiser should determine the home’s market value. In some cases, each spouse might want a separate appraiser. In the best-case scenario, their appraisals will be similar. If they differ significantly, the couple may need to hire a third appraiser to resolve this. The spouse who is keeping the home may also want to hire a home inspector to check the property. If significant repairs need to be made, the spouses will need to decide how they will pay for this.
In most cases, the spouse keeping the home will have to refinance it. This could mean a bigger mortgage. The other spouse should be removed from the mortgage and the title. An attorney may provide advice about the best approach to this process. One alternative to refinancing could be having the spouse who is not keeping the home keep another piece of property of equivalent value. This might be a physical possession, such as a boat, or it could be stocks or other assets.
It is important for couples to understand the financial ramifications of decisions about property division that they make during the divorce process. For example, when comparing a home’s value to that of other assets, individuals should be sure to account for expenses associated with the home, such as taxes and upkeep. They should also note whether there are taxes or other fees that could reduce the value of the asset that is being taken in exchange, such as a retirement account that is taxed on distribution.