Divorce Mortgage Options in Texas: Keep the House, Pay Off Your Spouse
We help you buy out your spouse using a court-approved Owelty lien, without triggering Texas cash-out refinance rules, so you can move forward with clarity and control.
How Can an Owelty Lien Help You Stay in Your House After Divorce?
At LendFriend, we specialize in divorce mortgage strategies across Texas—including Owelty liens that let you keep the home while fairly paying your ex-spouse their share of the equity.
Here’s how we make that possible:
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You don’t have to sell the home: Owelty liens allow one spouse to keep the house while paying off the other—without forcing a sale or moving the kids out.
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More equity access than a cash-out: Unlike standard Texas cash-out refinances (which cap you at 80% loan-to-value), Owelty refinances may allow up to 95% LTV—giving you more borrowing power.
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Avoid cash-out penalties: Texas has some of the strictest laws in the country when it comes to tapping home equity—thanks to Section 50(a)(6) of the state constitution. Traditional cash-out refinances in Texas come with lower loan limits, higher interest rates, and a long list of restrictions. But an Owelty lien is treated differently. Because it’s a court-ordered equity division, not a voluntary payout, you can often avoid the costly rules that come with a Texas cash-out refinance.
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Full legal separation: With an Owelty lien, we help ensure the departing spouse is removed from both the mortgage and the deed, giving both parties a clean financial break.
Most lenders don’t understand Owelty liens. We do.
Let’s structure your Texas divorce refinance the right way—so you can stay in your home and move forward confidently.
Keep the House. Buy Out Your Spouse. No Cash-Out Penalty
At LendFriend, we help divorcing homeowners in Texas use Owelty liens to stay in their homes and access equity—without triggering the restrictions and higher rates of a Texas cash-out refinance.
That’s where we come in.
Instead of forcing a sale or taking on a costly 50(a)(6) loan, we help you structure an Owelty lien that lets one spouse keep the home and pay the other their fair share of the equity. It’s the cleanest legal and financial way to divide a home in a Texas divorce.
It’s a smart solution for:
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Spouses who want to keep the home after divorce
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Families with children who want to minimize disruption
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Anyone who wants to avoid the downsides of a Texas cash-out refinance
We’ll help you navigate the legal and mortgage process from start to finish—ensuring your Owelty lien is set up correctly and your divorce mortgage is handled with care.
Stronger Negotiating Position when Buying a Home
The equity in your current home is unlocked and used as a downpayment on your new home; meaning no sales contingency required! Sellers HATE sales contingencies. Without a sales contingency, your offer is stronger, increasing your chances of buying your next home with ease.
Get the Highest and Best Sale Price
Without feeling pressured to sell quickly, you can wait for the best offer on your current home. List your home at the best time, market it effectively, and attract more competitive offers. With no rush, you can negotiate better terms and get the highest selling price.
Reduced Stress
Don't worry about finding temporary housing or organizing multiple moves. Avoid the chaos of having to coordinate the sale of your current home and the purchase of a new one. Transition seamlessly from one home to another and reduce stress or anxiety, making the moving process more manageable and organized.
Time for Improvements
Make necessary renovations or updates to your new property before you move in. Painting, remodeling, or other improvements would be more challenging if you were already living there. Moving into a freshly updated home (instead of living in it during renovations) is just so much nicer!
Want to learn more about divorce mortgages in Texas?
Why Texas Homeowners Trust LendFriend During Divorce
LendFriend is a Texas-based mortgage broker that helps divorcing homeowners keep the house and access equity using properly structured Owelty liens—without falling into the trap of cash-out refinance penalties.
Divorce is stressful enough. You don’t need a complicated, confusing home financing experience making it worse. We make the mortgage process as simple, supportive, and strategic as possible—so you can move forward with confidence.
We’ve guided clients through divorce mortgages across Texas, including:
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Houston
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Austin
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Dallas–Fort Worth
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San Antonio
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Suburban and rural counties where home equity makes up the bulk of a couple’s net worth
Most lenders in Texas don’t understand the difference between an Owelty lien and a cash-out. They default to 50(a)(6) rules—and that means:
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Higher rates
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Lower loan amounts (80% cap)
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Limited access to equity
We take a smarter approach—working with attorneys, title companies, and underwriters to make sure your refinance is clean, compliant, and court-supported. Whether you’re staying for your kids, the schools, or just your peace of mind, we’ll help you make it happen.
FAQs: How Owelty Liens Work in a Divorce Mortgage
What is an Owelty lien in a divorce?
An Owelty lien is a legal tool used to divide home equity during a divorce. It allows one spouse to refinance the home and pay the other spouse their share—without selling the property or triggering cash-out penalties under Texas law.
Can I refinance with an Owelty lien before my divorce is final?
No. Lenders require a signed and judge-approved divorce decree that specifically references the Owelty lien and equity division. You can get prequalified before the decree is finalized, but you can’t close.
What’s the benefit of using an Owelty lien instead of a regular cash-out refinance?
In Texas, cash-out refinances are governed by strict Section 50(a)(6) rules that come with higher interest rates and limited flexibility. An Owelty lien avoids those penalties and can allow you to access more equity at a better rate.
How much equity can I access with an Owelty lien refinance?
You may be able to refinance up to 95% of your home’s value, depending on your loan type and lender guidelines. A typical Texas cash-out is capped at 80%, so this can make a major difference when buying out your spouse.
Does my ex have to sign anything?
Yes. The departing spouse must sign off on the Owelty lien and the refinance as part of the divorce settlement. This ensures clean title transfer and lender compliance.
Do I need to qualify for the mortgage on my own?
Yes. The spouse keeping the house must be able to qualify for the new loan individually—based on their credit, income, and debts. We can help you calculate your buying power before finalizing your divorce agreement.
What documents do I need for refinance with an Owelty lien?
Lenders will require:
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The signed final divorce decree
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A copy of the Owelty lien agreement
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The home’s current mortgage payoff
Can Owelty liens be used outside of divorce?
Yes. Owelty liens can also be used to divide equity between siblings, business partners, or any co-owners separating ownership—as long as it’s documented in a partition deed or court order.
Hear it from our happy homebuyers
5/5 Star Reviews on Google, Zillow, and Experience.
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We worked with the LendFriend team and could not recommend it more. As first time home buyers, there is a lot to learn - and LendFriend know how to share their knowledge with patience and professionalism.For anyone considering working with them, just go ahead and give them a call. You will not regret it.
Jesper Holdensen
Closed June 2025 -
Wow my husband and I were truly impressed with how easy the LendFriend team made our home buying experience. Eric and his team took extra care in explaining and outlining each step -- a real customer first experience. On top of that, each member of the team was incredibly knowledgeable, organized, and responsive; resulting in an expeditious close! The website promise of working around the clock to support you is 100% factual, we had staff answering questions late night and weekends. The entire team was a real pleasure to work with, so if you are looking for a mortgage broker look no further, LendFriend is the team for you! They will give you peace of mind, get you the best rates, and make you feel confident when buying your home :)
Sarah Carr
Closed May 2025 -
I had been looking for a house for 2-3 years and while it was a journey as a business owner with a difficult financial situation this company did what 6 others could not. They got me a jumbo loan based off my business income and when I needed more they just made it happen twice. This process of funding can be extremely difficult and basically a blow to the ego but Eric and his team are literally magicians and my fiancee and I are now closed on out dream house. I recommend them whole heartedly
Shawn Tassone, MD, PhD
Closed April 2025 -
LendFriend is the only place to go for mortgage brokerage services. Their unparalleled technical knowledge, relationships with a wide array of lenders, and outstanding service make them the absolute best place to secure your next mortgage.
Robert Daake
Closed March 2025 -
LendFriend was such a wonderful partner in the process of buying our first home. They were so helpful and patient in giving us guidance, and their availability to communicate was next-to-none. I can't recommend them highly enough!
Hunter Hampton
Closed February 2025 -
Highly recommend LendFriend!!! As daunting as the process can be to get pre-approved for a mortgage loan, the entire team was great that we worked with that got us to the finish line. Each team member helped us in clearly communicating each step to ensure every step was smooth, in addition being available for a quick call to walk through our questions and concerns when needed. LendFriend was also very competitive with rates and dropped our interest rate last minute right before we closed! They got the job done and made it as stress free as possible.
Ingrid Eichenberger
Closed December 2024
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