Scotty Gifford

FYI Realty - Katy
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Buyout Divorce Calculator, Equity Buyout for Divorce

November 12th, 2021


To use the Buyout Divorce Calculator at go to


How Do I Buy out A House from a Spouse?

The divorce process can make real estate even more complicated. It is our goal to provide the answers to common questions, such as, What is my House worth?


Can I keep the house or should we sell it?  Can I Buy out my spouse's Equity?   

What happens to the House During Divorce?


There are several options that spouses need to consider when deciding on what to do with the family house.  Who Gets The House in a Divorce in Texas?


One of the biggest questions we get asked is  How do I buy out a house from a spouse? 


One of the most powerful tools to help buy out your soon-to-be ex-spouse is to use what is called an Owelty Lien. 


 House BuyOut in Divorce, What is an Owelty Lien? 


According to Webster Dictionary, an Owelty lien is a lien created or a pecuniary sum paid by order of the court to effect an equitable partition of property (as in divorce) when such a partition in kind would be impossible, impracticable, or prejudicial to one of the parties. 

This type of loan can also be used for probate, where multiple children are gifted a house or land after their parents have passed on. An owelty lien is a tool to utilize when the equity of a home needs to be split. 


Owelty liens are a type of deed that allows divorcing couples to divide the existing equity in the marital home. This action is commonly utilized in divorces to “buy out” the remaining spouses’ interest in a home.


The party giving up their interest in the home obtains a lien against the property through a divorce decree, called an Owelty Lien. A very important fact is that an Owelty Lien must be filed at the courthouse in the county records. When the party retaining their interest in the house refinances or sells the home, the other party is paid the value of their Owelty Lien. This solution allows one person to obtain the full interest in the home while removing the out spouse from the mortgage and providing them with some of the equity in usable cash.


In Texas, the Owelty Lien is more valuable than in any other state. It is the only way a divorcing couple can access more than 80% of the home's current value without violating the Texas A6 law, or cash-out law. Without the Owelty Lien, borrowers will pay cash out rates that can be higher than a traditionally lower rate and term rates. 


The Gifford Group can connect you with both Local Lenders or Local Attorneys that can help through this process. 


Why Not Use the Cash-Out Refinance to Buy-Out My Ex-Spouse?


That is a good question, Without an Owelty Lien, the parties would be limited to only cashing in on equity up to 80% of the value of the property under Texas Equity laws. An owelty lien allows the borrower to recoup up to 95% of the value of the property.  Also, the owelty lien allows the refinancing spouse to get a regular refinance, which is critical since it gives the borrower lower rates and better terms.


How Does An Owelty Lien Actually Work?


Let's walk through an example, Sara and Sam are going through a divorce. Their home is valued at 450,000, and the couple currently owes 250,000. Let’s assume they are splitting the equity 50/50 (or 100,000 each). Their divorce decree must specify the owelty and the owelty lien must be recorded with the courthouse. Sam would then be able to refinance the property at 400,000: the 250,000 owed on the mortgage in addition to Sara’s 150,000 owelty lien. Sara receives her 150,000 and now Sam is the sole owner of the home, with Sara removed from the mortgage and the deed. 


In this example, if they try to just use a standard cash-out refinance the biggest loan they could get would only be 360,000. The reason for this is because (Current Value X 80% = loan amount) 450,000 X 80% = 360,000. Using the Owelty Lien, the couple can get more equity out of the house and use the money to pay off the out-spouse. 


Get connected with us today and we can help determine the true value of your property, and help you uncover any unknowns that could stop you from refinancing your property. Property division can be scary, take a look at the three ways to determine the value of a home


It is important to protect your credit when going to Divorce so you can buy a house after divorce. What happens to the House During Divorce?


 Download Our Free Informational Resource Protect Yourself & Get The Facts!  

Youtube how to use the calculator

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Disclaimer : The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the Houston Association of REALTORS®

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Our focus is on Divorce and Real Estate, We can help you during all stages of divorce, as we have relationships with divorce professionals. Rest assured that you will be working with professionals at all times, and we have the team to support you.
FYI Realty - Katy
25807 Westheimer Pkwy Ste 240, Katy, TX 77494   Get Directions
Phone: (713) 395-4975
Fax: (832) 201-9126
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