For most married couples, their primary home represents their biggest asset. The accrued equity, as well as any improvements or upgrades made to the home, can add up to quite a bit of money. It’s natural that people going through a divorce want to know what their chances are of retaining the marital home. You may want to keep your home for sentimental purposes, or you may worry about your ability to finance another home because you don’t have a down payment saved up yet.
The truth is that property division is different in every divorce. Unless there is a legally sound prenuptial agreement or clear proof one spouse owned the house prior to marriage, it can be difficult to predict how the courts will choose to divide a home or the equity established in it.
Many factors influence the court’s decision
When the courts decide how to divide property, they look at a number of important considerations, including the length of the marriage, the income and contributions of each spouse, the potential of each spouse for future income, custody arrangements for any marital children and standard of living expectations. When looking at the ownership of the home, they will also look at the ability to qualify for and make payments toward a mortgage.
Because there are so many different considerations that influence asset division, it is difficult to know how the courts will handle a home in a divorce. Sometimes, if the home has very low levels of equity, the courts will order the home sold. Other times, especially when there are minor children involved, the courts may decide to award the home to the custodial parent. This decision usually results from wanting to keep things as stable as possible for the children by allowing them to stay in the home they know and in the same school district.
In most cases, the value in the home gets split
Different states have different laws about property division, and Texas is a community property state. That means that any property acquired during the marriage is community property. The courts will do their best to fairly divide community property in a divorce, including any equity you have in your home. You provide the courts with an inventory of assets, which they then use to help determine how to split your possessions.
In situations where one spouse receives the home, that person will need to refinance the property in many cases to remove the other spouse from the deed and mortgage. Some equity could be withdrawn for the other spouse. Other times, the courts could award an equivalent amount to the non-owner via other assets, such as retirement accounts.