Married couples enjoy a higher standard of living because they pool their resources. They also both contribute to the maintenance and upkeep of the home where they live. Spouses in Texas often commit a sizable portion of their monthly budget toward their residences.
Mortgage payments can often consume up to 30% of someone’s standard monthly income. Beyond that, people may also have a second mortgage or home equity line of credit. They may save up for repairs, expansions or remodeling projects. The more years that they live together in the home, the more equity they accrue.
How can divorcing spouses in Texas address the shared equity in the home where they live together during a divorce?
Establish a reasonable fair market value
The first step toward fairly dividing home equity involves determining exactly what the house is worth. This process typically requires consulting with real estate professionals, including seller’s agents or appraisers. These professionals can help set a fair market value based on the condition of the property and the performance of similar homes on the local market recently. It is only after establishing what the home is worth and then looking at the principal balance on the mortgage that people can determine exactly how much equity is in play during the divorce.
Discuss possession
Determining how to split the home’s equity typically requires that spouses address who will live in the home after the divorce. Often, custody considerations influence decisions about real property in a divorce. The parents assuming more responsibility for the children may stay in the marital home as a way to keep things stable for the children. Either spouse could potentially stay in the home, and the other should receive either withdrawn equity after refinancing the mortgage or other assets worth a comparable amount to their share of the home’s equity.
Spouses setting their own terms and family law judges can be as creative as necessary to come up with a fair way to divide the equity in the home. Many people with higher-value marital estates in Texas prefer to retain control over the property division process and therefore try to negotiate with their spouses or agree to attend mediation. Others simply cannot resolve the intense conflict that arises related to their home and need to ask a judge to divide their marital resources.
Learning more about the Texas community property statute and establishing the current value of the home are good decisions for those worried about preserving their interest in their marital home. Seeking legal guidance is a good way to take a personalized approach to the consequential process of property division during divorce.
