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Mortgage payment issues may arise after property division

On Behalf of | Jul 16, 2014 | Property Division |

One of the issues that often arises during a divorce is whether one spouse should keep the family home or should it be sold. The decision to keep the home may complicate the property division process. If the couple purchased the house after they were married, it would be regarded as community property in Texas, which is a community property state.

The spouse who wishes to keep the property may not be able to obtain a new mortgage to refinance the home in his or her name, leaving the other spouse jointly responsible for mortgage payments. Even if the divorce decree allocates the property to one spouse, the mortgage holder will hold both responsible. A new mortgage application is best done before the divorce proceedings begin or after completion. Prior to the start of divorce proceedings, a quit claim deed will have to be signed by one spouse to release the property from his or her name.

Until the property is either sold or refinanced, the credit reports of both spouses will show them as owners of the property. The ability of the spouse who keeps the property to maintain mortgage payments will directly impact the credit score and credit history of the spouse leaving the home. This may present problems when the person leaving the property applies for a mortgage on a new home.

Whether a Texas couple is considering divorce or has finalized a divorce, communication and compromise are often the best ways to resolve property division issues. Couples may want to keep in mind that a divorce decree will not end an individual’s responsibility of debt, and only by working with the individual creditors can credit reports be updated with new details of the responsible person. Couples may benefit from obtaining legal advice to ensure the smooth transfer of property.

Source:, “How to Divide Your House in a Divorce“, Scott Sheldon, July 9, 2014