What to do regarding a ivorce agreement to split half of the equity in a home?
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What to do regarding a ivorce agreement to split half of the equity in a home?
Divorce agreement was to split half of equity of the home. Is there a difference between refinancing the mortgage vs taking an equity loan? If I take an equity loan as opposed to refinancing the original mortgage, would that be violating court order?
Asked on May 22, 2012 under Family Law, Texas
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
If the marital dissolution decree that you are writing about states that you and your former spouse are to split the equity in the home, there has to be a stated date of valuation. If stated, then one would get an appraiser to value the home as of that date. Once done, you ascertain the equity in the home and arrive up with a number. One half of that number will be allocated to the former spouse.
Somehow, if you are keeping the home, you need to pay the former spouse this one half value. If you take an equity loan on the property to pay off the former spouse as opposed to refinancing the original mortgage, there would be no violation of the court order that you write about.
Refinancing the loan in existence means that there is a new loan replacing the on ein place typically at a lower interest rate. An equity loan is typically a second loan obtained secured by the equity in the home where some money is pulled out of the home's appraised value to the borrower.
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