For any estranged Texas couple, divorce can be unsettling, not only emotionally, but financially as well. Quite a few complicated issues are involved in a Texas divorce, including child support, child custody, and property division. None of these issues are easy to settle.
Where property division is concerned, dealing with the house is often the trickiest. While one may want to keep the house, the other may want to be relieved of the mortgage. A viable alternative here is to refinance the loan in a single person’s name, but this is not easy. The only other solution in this situation is to sell the house.
The issue becomes even more complicated when a jumbo loan is involved. When this loan is refinanced, one that is higher than the government-financed loan limit of $417,000, the person’s income and net come into play. A person’s debt-to-income ratio also matters when it comes to refinancing. According to the federal government, to secure a loan, one needs to have a 43 percent DTI ratio. This ratio considers debt payments compared with the gross income. Nonetheless, before property division, one should remember that the person ought to have paid child support or alimony for a minimum of one year before it can be regarded as a reliable income.
Often, a person’s credit rating can come in the way of property division. One spouse may agree to pay the mortgage while the other makes the payments. These figures will appear on each person’s credit reports.
Source: The Wall Street Journal, “In a Divorce, How One Spouse Can Keep the House,” Anya Martin, Nov. 5, 2014