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What comes first: refinancing or signing a quitclaim deed?

On Behalf of | Sep 21, 2022 | Property Division

Divorcing in Texas often means making difficult compromises. You and your ex may want to keep certain property, and you may disagree strongly about the appropriate or fair way to handle certain property or financial obligations.

The longer you remained married and the more property you have with your spouse, the more the two of you will need to negotiate as you divide both your belongings and your financial obligations. The home where you live is probably your biggest asset and also your single largest source of debt in the form of the mortgage attached to it. You may both want the home, or you may agree to let go of it in return for other concessions.

If your spouse keeps the home, they will typically have to refinance the property to pay you some of its equity. You will also have to sign a quitclaim deed relinquishing your right to the property’s title. Should the refinance process or the deed occur first?

Deeds are often necessary for refinancing

You may feel like you don’t want to officially let go of your ownership interest in the property until you have proof that your spouse refinanced and removed you from the mortgage. However, they likely can’t close on their mortgage without first removing you from the title of the property.

It can feel like a vulnerable position to be in, but the truth is you should already have certain protections. Whether you have a signed settlement agreement that you both agreed to in mediation or a property division order created by a Texas family law judge, you should already have binding documents affirming that you should receive equity from the front refinance transaction for signing the deed.

Agreeing to execute the deed before your ex has finished refinancing will not eliminate their obligation to pay you in accordance with your agreement or property division order.

Violations can lead to another hearing in court

If your ex won’t transfer the funds to you as they should, you will be able to go back to court and ask for the enforcement of your property division order. You can protect your interest in the property without refusing to sign a deed and possibly delaying the process.

Understanding your rights will help you feel more comfortable during the complex process of dividing your marital estate.