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.
See Why Refinancing Homeowners Love Working With LendFriend
5/5 Star Reviews on Google, Zillow, and Experience.
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They were great. They took the time to explain the process and help us through from start to finish. LendFriend gave us confidence that refinancing when we did was the right the call.
Skylar Eberhard
Closed October 2025 -
The experience using LendFriend Mortgage was simple and professional. Eric and his staff handled all issues quickly and provided excellent guidance to make the approval process easy. I would highly recommend LendFriend to anyone seeking a mortgage.
Pat DeLuca
Closed September 2025 -
Eric and team are awesome. Super clear communication and follow through. Eric also explained complex things patiently and clearly.
Brian Parks
Closed August 2025 -
Professional, responsive, and easy to work with from start to finish, they made the process smooth and stress-free!
Lisa Salzberg
Closed July 2025 -
Working with Eric we had exceptional service. He was easy to contact, responsive and always made sure we understood the process and what was needed. We have used Eric multiple times and will continue to, thank you Eric!
Jason Elrod
Closed July 2025 -
I had a great experience with Eric and his team for my VA IRRRL refinance! They were incredibly helpful, and we got everything done in just a few weeks with no issues whatsoever. I cannot recommend LendFriend enough, and they will always be my first call for any future needs. Thank you Eric!
Tyler Stearman
Closed March 2025
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