How to Remove and Buy Out Your Co-owner for Texas Properties

So paying out a co-owner on a separation in Texas can have challenges. One of our biggest challenges we see in Texas is there's a law called the Texas A-6, which allows you to only take out up to 80% of the value of your home. But there's some good news for this.

One way we can avoid this 80% limit when it comes to paying out an ex-owner or another owner that wants to get off the property is called an ulty deed. And a lot of lenders don't actually understand this or know about it. Here's what you should know when we're removing another owner from a property and paying them out their equity or cash portion of the property:

the best way to do this is by again, using an instrument called an ulty deed, which is generally used in divorces, but can be used with any joint ownership on a property in Texas.

The ulty deed will create a lien on the property for the amount owned to the ex owner that will be vacating or coming off the property. Typically, this is agreed upon a separation agreement or divorce agreement, but there could be other ways to agree on that equity separation.

This ulty deed will allow the person retaining the home to do a regular refinance and not considered a Texas A-6 or cash out which limits you to that 80% in the state of Texas. And you can generally go up to 95, sometimes even 97% of the value as of what we call a regular rate and term refinance, which will typically allow us to go up to 95 or 97% of the value and paying off that ulty deed at the same time.

This will allow you to, again, to avoid the limits of 80% in Texas of pulling out that cash and avoid you from doing what we call a cash out interest rate, which is much higher than a regular refinance or what we call rate in term. So if you have any questions about this, any questions about using an ulty deed to get out the maximum cash and buying out a partner in a property, please don't hesitate to call, text, or email us today. We are happy to help.