Many times in a divorce it may be possible for one of the spouses to refinance and keep their home.
A tip for keeping your house in a divorce is to refinance the mortgage into solely your name. Then you can pay off the spouses share with a cash out refinance or other assets. This can be a useful method when there is enough equity in the home.
In Texas, the spouse who is keeping the house needs to pull out the equity, if there is any left, through refinancing and give it to the other spouse. Though there is 80% LTV limit when someone pulls the equity out of their homestead, the state will let you go over 80% LTV when you are pulling the equity to pay off the other spouse. Also, this transaction won't be considered as a Texas Cash Out.
In any divorce situation, you would be wise to consult a mortgage professional in addition to your attorneys or mediators. A mortgage professional will not tell you what to do with your home or how to handle your divorce, but they will be able to guide you as to how best implement the plans that you have made. They will also be able to help you understand tax implications and credit issues surrounding your home and your mortgage.
To keep your home in a divorce you can always request that you keep the home and refinance to get your husband/wife off of the loan and/or title. By keeping the home and refinancing with a cash out refinance you can also pay him/her off with either her share of the equity or whatever court-ordered amount you are required to pay him/her.
It is very important to keep paying your mortgage payments on time during and after a divorce. The delinquency of a mortgage payment can adversely effect your credit score. This in turn will limit the types of loan programs you can refinance under.
Make sure that your spouse refinances right away. If they do not and fail to make paymnets it can affect your credit. Most divorce decree's state a specific date that the loan has to be refinanced by.
There are currently 9 community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.
In these nine states, any property that was acquired before the marriage stays with the person who acquired the porperty. Any property that was acquired while the couple was together, must be split directly in half. It does not matter whose name the mortgage is in, or who actually acquired the property, the only exception being inheritances and gifts (in some states).
You should consult your local divorce attorney to see what you are entitled too.
If you are a "displaced spouse" as a result of a divorce, you may qualify for some first time buyer programs.