Is refinancing considered the sale of a home?

UPDATED: May 18, 2012

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Is refinancing considered the sale of a home?

In my divorce decree my ex-wife is supposed to pay me money if or when the house is sold. She is refinancing the house with her new husband. My name will come off the deed. Now, in the divorce she was awarded the house. Is refinancing considered the sale of the house. Her attorney says no because the house is not being vacated and there is no bill of sale. However, I don’t trust her and needed to find out on my own.

Asked on May 18, 2012 under Family Law, Texas


B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Refinancing is not a sale.  It is simply the renegotiation of the terms of a note to pay for what someone already owns.  If there is a large sum still due on the mortgage, this could be a great benefit to you.  Many divorces decrees award a house  to one spouse, but when that spouse defaults, the banks have the right to go after both spouses who signed off on the mortgage.  The theory is that they are not bound by the divorce decree because they were not a party to the divorce.  If your wife refinances and gets your name off of it completely, then you will no longer have any liability associated with the mortgage debt.

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