Category: Divorce

OWELTY LIEN: A Great Way to Refinance and Split up Equity in a Divorce

No one wants to get a divorce. However, if it is inevitable, there are ways for partners to make a clean break and get their fair share of the property in question by getting an Owelty lien.

Since Texas is a community property state, if you are married, and you own a primary residence with a homestead exemption, both spouses have equal rights to the equity in their home.
If Your Name is On the Mortgage, You Are Still Responsible For Payments After A Divorce. Most spouses think the divorce decree releases them from obligation to the lender. That is not the case. Even if the decree awards the property and the debt to one spouse, if the other spouse is on the mortgage, they are still responsible for the debt. Any late payments or other derogatory reporting will be reflected on both spouse’s credit report and would negatively affect each spouse’s credit score.

An Equitable Work Around

An Owelty Lien is a way to give each spouse what is owed to them as detailed in the divorce decree without having to sell the house. You don’t have to have the required 20% equity which would be required on a Texas Cash Out Refinance.

For more information on Owelty Liens, please call Todd Kurio, Residential Mortgage Loan Originator. 512 459 2405, NMLS #214411/216616, Capstar Lending, Equal Housing Lender.