mortgage

Understanding the Difference of a Mortgage Deed from a Property Title of a Marital Home


When you’re going through a divorce proceeding, the last thing you need is misinformation. You have to be aware of all the terms of conditions that are being discussed. It could dictate the quality of your life in the foreseeable future. 

The legal terminologies that are being thrown around should be clarified by your lawyer. You need to make sure that you fully understand any agreement that you sign on to. In the tedious process of dividing the property, it is important to learn every slight detail.

Mortgage Deed Vs. Property Title

For most couples, the family home is the most significant piece of property. Because of this, it is the most complicated to divide. It is important to know the difference between a mortgage deed and a property title; this will have implications on the division.

A mortgage refers to a loan agreement wherein the debtor uses the title of his property to secure a loan from the bank of another creditor. In this arrangement, the transfer of title is void once the loan is paid in full. 

The mortgage deed is evidence of ownership of a property that is under mortgage terms. If one spouse wants to obtain true ownership of their marital home, they can execute a “quit claim” deed. This deed will relinquish the ownership of rights of one ex-spouse making the other spouse the sole owner, but it will still not take away the obligation of either spouse in terms of their loan agreement.

In this case, the mortgage is still named to both spouses. The only way for a spouse to be eliminated from the ownership of the house is for the other spouse to execute a buyout of the rights. 

True Value

It is always good practice to determine the actual or current value of the house before any transaction takes place. This is an extensive market analysis of the house from a real estate agent or broker who specializes in divorce. This will be a sound basis for the buyout amount that one spouse will require before he/she relinquishes the rights. 

To summarize, if a spouse is awarded the family residence, then they need to buy out the other spouse and change the mortgage name in order to have full ownership of the property. In doing so, it removes any more financial responsibility from the other spouse. 

Thus, the true value of the house is needed to ensure that the payment for the buyout is reasonable for both parties. 

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Mr. Hutton is a Divorce and Custody Lawyer based out of Round Rock, TX. His background is with child psychology at Arizona State University where he received a B.S. in 2006, and he continued this by working with the Children’s Right’s Clinic at the University of Texas School of Law where he received his J.D. in 2009. Throughout his practice, he has been a strong proponent of utilizing modern technology to improve his practice and the representation of his clients. He currently is the technology chair of CAFA of Travis County and is committed to improving and modernizing the practice of law in Texas.

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