Refinancing a Mortgage Can Render Separate Property, Community Property

Refinancing a Mortgage

Refinancing a Mortgage Can Render Separate Property, Community Property

In re Marriage of Branco concerned the characterization of property which was purchased before marriage and refinanced during the marriage.

In 1970 the wife purchased real property. She and her husband got married in 1977. A year after she got married to her husband, they refinanced the property using a portion of the new loan to pay of the original loan which was approximately $23,483. The remaining loan was used to pay off debts. Later on during the marriage the parties obtained a second loan that was used to pay off other debts and make improvements to the home.

The family law court found that the home was the wife’s separate property and the loans were community debts. The parties were ordered to pay one half of payments on the two loans. The husband filed an appeal and argued that because the community paid off the mortgage that was obtained before the parties were married, the community stepped into the shoes of the separate property owner and became the new owner.

The appellate court agreed with the husband and said that the community is entitled to an interest if it contributed towards the property’s acquisition. Paying off the mortgage during marriage through the refinance of the property, rendered that portion of the home community property.

If you need legal advice and are looking for a family law lawyer in Orange County to address a dissolution issue such as characterization of property or any other divorce matter such as legal separation, annulment, custody, child support, spousal support and/or property division, please consider Treviño Law in your divorce attorney search. We are located in Laguna Hills right off Lake Forest exit to both the 405 and 5 freeway.

Although the posting of this information can be considered free legal advice for a divorce in Orange County, it does not address other factors which may play a significant role in a particular dissolution. Circumstances in your divorce may alter the results in your dissolution.

Please note that this legal advice does not establish a family law attorney-client relationship. This is a legal advertisement for Treviño Law, Inc.

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