How I Helped a Homeowner Complete a Divorce Equity Buyout With Low Credit

Divorce often forces one of the most difficult financial decisions a homeowner will ever make: how to keep the house while buying out a spouse’s equity.

In Texas, the best method is through an Owelty lien, but most lenders either don’t understand Owelty liens—or avoid them altogether. They try to force you into a more expensive Cashout Refinance.

In the video below, I share a real-life Texas divorce mortgage case study where I helped a woman complete an equity buyout using divorce-specific lending strategies, despite low credit and a long employment gap.

Texas Divorce Equity Buyouts Are Not Standard Refinances

An equity buyout during divorce is very different from a traditional refinance. In Texas, these transactions often require:

Properly structured Owelty lien documentation
A divorce decree that clearly awards property ownership
Compliance with Texas homestead and cash-out rules
A lender who understands divorce timelines and title issues

This case involved all of the above—plus additional challenges most lenders won’t touch.

The Borrower’s Situation: Why This Was a High-Risk Case on Paper

This homeowner had been in an abusive marriage for over 20 years, which created several lending obstacles:

A 601 credit score
A 20+ year employment gap
No recent traditional income history
The need to complete a Texas divorce equity buyout
Significant emotional and financial pressure during divorce

From a conventional underwriting perspective, this would look like an automatic decline.

From a Certified Divorce Lending Professional’s perspective, this is where strategy matters.

Why Most Lenders Fail With Owelty Lien Divorce Loans

Many lenders say they “do divorce loans,” but in practice:

They don’t understand Owelty liens
They misclassify the loan as a Texas cash-out refinance
They overlook how divorce decrees interact with title
They discover fatal issues late in the process

That leads to delays, denials, or deals falling apart after attorneys and clients have already invested time and money.

Divorce lending requires precision from day one.

How We Structured the Owelty Lien Equity Buyout Correctly

Rather than forcing this into a standard loan box, I focused on:

Reviewing the divorce decree and property award language
Structuring the loan as a Texas Owelty lien refinance, not a cash-out
Coordinating timing with the divorce process
Ensuring title, underwriting, and closing were aligned
Using lender guidelines that allow for post-divorce housing stability

Because the loan was structured properly from the beginning, the equity buyout was completed without last-minute surprises.

She kept her home—and her financial footing during a critical transition.

Why Owelty Lien Experience Matters in Texas Divorce Lending

An Owelty lien is not just a document—it’s a strategy.

Handled incorrectly, it can:

Trigger Texas cash-out rules
Kill a refinance late in underwriting
Create title defects
Delay divorce settlements

Handled correctly, it allows a divorcing spouse to:

Buy out equity legally and cleanly
Retain ownership of the homestead
Avoid unnecessary cash-out restrictions
Move forward with stability

This is why divorce attorneys and real estate professionals regularly refer clients to lenders who specialize in Texas Owelty lien transactions.

Who I Help With Divorce and Owelty Lien Mortgages

I work with:

Divorcing homeowners needing Texas equity buyouts
Spouses with credit challenges after divorce
Clients using Owelty liens to keep the marital home
Divorce attorneys and realtors who want certainty at closing

If you’ve been told “this can’t be done,” or if an Owelty lien loan has already fallen apart once, it’s worth getting a second opinion.

Final Thoughts on Divorce Mortgages and Owelty Liens

Divorce changes everything—but it doesn’t mean homeownership has to end.

With the right loan structure, the right timing, and the right expertise, Texas divorce equity buyouts using Owelty liens are absolutely possible, even when credit or employment history isn’t perfect.