For many families, the house is their largest asset — and in a Texas divorce, it’s often the most emotionally and financially complicated issue to resolve.
In this episode of The Jennifer Hargrave Show, Dallas divorce attorney Jennifer Hargrave sits down with Certified Divorce Lending Professional (CDLP) Julie Howell of PrimeLending to break down what really happens to the marital home during divorce.
If you’re wondering:
- Can I keep the house after divorce?
- What is a mortgage assumption?
- How do I remove my spouse from the mortgage?
- How do I access equity in a Texas divorce?
- Will child support or spousal maintenance help me qualify for a mortgage?
- How do interest rates impact divorce settlements?
This episode provides practical, strategic insight for anyone navigating property division in a Texas divorce.
Jennifer and Julie discuss:
- Mortgage assumptions vs. refinancing
- Owelty liens (co-owner buyouts) under Texas law
- Home equity loans and Texas homestead protections
- Qualifying for a mortgage after divorce
- Using child support or spousal maintenance as income
- The risks of leaving your name on the mortgage
- Affordability challenges in today’s interest rate environment
If you’re considering divorce in Dallas or anywhere in Texas, understanding your mortgage options early can dramatically impact your settlement strategy.
At Hargrave Family Law, we believe informed decisions create stronger futures — especially in collaborative divorce and high-asset cases.
Refined Transcript:
Jennifer Hargrave:
For most families, their house is one of the biggest assets they own. And certainly for families facing divorce, there are all kinds of questions about whether they can afford to keep the house, buy a new house, or refinance. All of that hinges on interest rates and what’s happening in the mortgage industry.
My guest today is Julie Howell. She’s a mortgage loan officer who specializes in helping families facing divorce explore their options and find workable solutions. Julie, I’m so happy you’re here.
Julie Howell:
Thank you for having me. I’m excited to be here.
Jennifer:
Let’s dig in. What are the top trends you’re seeing right now, especially as they impact families facing divorce?
Julie:
Interest rates are a hot topic. Specifically in divorce scenarios, if the current home was refinanced during the COVID-era low interest rates — sometimes below 3% — that creates a challenge. Couples are asking: Do we have to refinance? Can we assume the loan? Do we buy the spouse out?
The big buzzword right now is affordability.
Jennifer:
During COVID, we saw record low interest rates. At the same time, home values increased dramatically. So couples now may have significant equity. Let’s start with loan assumptions. What is that?
Julie:
A loan assumption allows one spouse to take over the existing mortgage — same interest rate, same payment, same balance — and remove the other spouse from liability.
Government loans like FHA and VA are generally assumable. Conventional loans — which most people used during the low-rate refinance boom — are not always assumable, though we’ve seen some exceptions.
Jennifer:
If both spouses are on the mortgage and one is keeping the home, why is it so important to remove the other spouse?
Julie:
Because as long as your name is on the mortgage, you’re legally liable. With an assumption, the house spouse must qualify on their own income and credit. The lender will re-underwrite the loan to ensure they can afford it independently.
If they qualify, the other spouse is released from liability.
Jennifer:
But that can be difficult if the spouse keeping the house hasn’t been the primary income earner.
Julie:
Exactly. If the stay-at-home parent wants to keep the home, qualifying can be more challenging.
Jennifer:
If assumption isn’t available, does the house have to be sold?
Julie:
Not necessarily. You could refinance into a new loan to remove the other spouse. You can also use a non-occupying co-borrower — like a parent or sibling — to help qualify.
Sometimes spouses agree to leave both names on the mortgage temporarily. However, that comes with risk. Even if the divorce decree assigns the debt to one spouse, the lender hasn’t released the other spouse unless there’s an assumption or refinance.
Missed payments could still damage credit.
Jennifer:
That’s such an important point. Even if there’s trust between spouses, there’s still risk.
Now let’s talk equity. If there’s significant equity in the home, how does the non-house spouse receive their share?
Julie:
There are a few options:
The house spouse could pay equity from other assets.
An Owelty lien — a Texas-specific co-owner buyout — allows the refinancing spouse to pull equity out at favorable terms.
A home equity or cash-out refinance.
In Texas, homestead protections are strong. Home equity loans are capped at 80% loan-to-value and have a 12-month waiting period before refinancing again.
Owelty liens are often more flexible and can allow higher loan-to-value and better interest rates.
Jennifer:
And qualifying for these options requires income stability?
Julie:
Yes. Lenders look for:
Stability
History
Probability of continuance
W-2 salary income is easier to use than 1099 contractor income. Variable income like bonuses typically requires 12–24 months of history.
Jennifer:
What about child support or spousal maintenance?
Julie:
Those can count as income if:
There’s a six-month documented history
The payments are court-ordered
There are at least 36 months remaining from the loan date
It cannot be voluntary.
Jennifer:
That’s why it’s so important to work with a knowledgeable Dallas divorce attorney and a certified divorce lending professional early in the process.
It doesn’t cost anything to understand your options — but it can cost a lot to be surprised later.
Julie, thank you so much for sharing your expertise.
Julie:
Thank you for having me.
