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Written by
Noel Cookman

Q&A #4: Does a Divorcing Homeowner Need an Equity Loan to Buy Out a Spouse?

Published On 
November 7, 2017

A Family Law Attorney writes:



I have a divorce matter where the parties have about $100,000.00 in equity.  I need to get a home equity to buy the wife out, or at least have an option to negotiate.

Can you help?

ANSWER: Don’t Use Equity Financing or “Cash Outs” for a Divorce Buyout

Thanks for writing. I recommend that (where there is no equity financing on the underlying mortgage – i.e., no TX 50(a)(6)) the buyout be established via the Owelty agreement and lien within the decree. In other words, avoid home equity loans if at all possible. In divorce, one is able to access the home’s value (“equity”) without triggering the restrictive Texas Home Equity limitations.

And, yes. Not only can I help. I can provide the money (qualifying required). If the grantor of the Owelty (DOT) will call or contact me, I will respond very quickly and develop a loan approval with specific recommendations for the structuring of the Owelty in the decree.

Does this help? Thank you so much.




So, I will have my client contact you.  He will be the party keeping the house. Or should I have the other attorney contact you?


That’s perfect. Your client – keeping the house – will need financing…that’s what I provide. I’ll also “fish” for any needs his spouse may have and try to get an introduction there. Sometimes it works, sometimes the other side isn’t at all amenable. But, I always offer.

Thanks so much. I’ll report back.



I also have another where the house is free and clear and worth about $100,000.00 (Fannin County).  My client is retired and is on limited fixed income.  Can it be done that way too?


Absolutely. That’s what we do. Remember, I do the financing. But, I always give helpful advice to either/both parties. I answer questions and explain how the process works to either/both parties.


Don't forget, you can write your questions to me at [email protected]

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