Who Gets the House?

 The equity in the marital home is usually the most significant portion of the marital estate depending on the size of any existing mortgage and however illiquid the equity may be.  The house becomes one of the most common topics next to children that become a point of contention during a marital breakup.

If neither party is interested in retaining the marital home, the house can be sold, the existing mortgage paid off, and the equity converted into a liquid asset that can be divided between the parties. When one party wants to retain the home, however, there are other factors that must be considered.

If there is an existing mortgage in both parties’ names, a simple property transfer is not enough to protect the interest of the spouse who is relinquishing the home to the other party.  Relinquishing property rights does not extinguish their obligations under the mortgage.  There should always include a corresponding indemnification provision if the spouse defaults on the mortgage obligations and hold the other spouse harmless.  However, even these types of provisions might not be enough.

Sometimes it can be more difficult to qualify for a mortgage on a new home while still owing on a mortgage for the marital home. Lenders know that regardless of the terms of the divorce decree that the spouse who relinquish the marital home is still liable if the residing spouse were to default on the mortgage.

Lenders often rely on income history in determining eligibility. In the case of divorce, the residing spouse in the marital home may be a stay-at-home parent and just re-entering the work force or may still be a stay-at-home parent about to start receiving child support/spousal payments. With lenders often wanting several months of consistent income before making a lending decision. 

These issues can complicate even the most amicable of divorces. If you are facing them in your divorce.  Having an attorney with the resources and knowledge to give you the best representation is vital to your interest and the interest of your family.  You also want to make sure they will exhaust all avenues and be willing to research, pursue and implement strategies to provide the best possible outcome.

Rob McAngus, Partner with Verner Brumley Parker, P.C., is Board Certified in family Law and his practice is devoted primarily to family law, including high conflict divorce, custody cases, and complex property issues. In addition to being selected on the Board of Directors for the Family Law Section of the Dallas Bar Association; he values your priorities as a parent and works with you to achieve the goals that will help transition your family to a new normal.  As both an adopted child and a member of a blended family, Rob can provide a unique perspective in the practice of family law.

Rob has been recognized in Super Lawyers as a Rising Star in 2016 through 2021, and recently The National Advocates recognized Rob as one of the Top 40 Under 40.  He can be reached by calling 214.526.5234 or email at rmcangus@vernerbrumley.com.  Mr. McAngus received his bachelor’s degree cum laude and master’s degree from Baylor University and graduated cum laude from the Dedman School of Law at Southern Methodist University.