Texas couples who decide to get a divorce may own a home that will need to be divided along with the rest of their property. Some couples may want to sell the home and split the profit, but in other cases, one person might want to keep the home. However, it is important to determine whether this is an affordable plan.
First, the couple must determine what the house is worth and how much equity there is in it. There might also be debts associated with the home that one or both must pay along with loan-related fees and taxes triggered by the transfer of title. Next, the couple must determine how one person will buy out the other person's share. One way to do this is through the property division process. If one person keeps the home, the other person can take property that has an equivalent value, such as a retirement account.
Some people may turn to family and friends for a loan. However, it might be possible to refinance the home. Another possibility is taking out a home equity line of credit although with a second mortgage, the interest rates could be higher than with a first mortgage. In some cases, the person might need to accept that keeping the home is not economically feasible.
A house is not the only asset that may cause complexities in dividing property. For example, for a 401(k) or a pension plan, a document called a qualified domestic relations order is usually necessary to divide the account in a divorce. Preparing this document can be complicated and expensive, and it must then be approved by a plan administrator. Even a decision to sell the home is not always a straightforward one. For example, if the property market is weak, the couple may need to wait to sell.