How Does an Owelty Lien Work for a Divorce Buyout in Florida?
In Florida, the term "Owelty Lien" isn't traditionally used; it is primarily a Texas real estate legal vehicle. Instead, a Florida divorce buyout is executed using a court-ordered Marital Settlement Agreement and a specialized "Limited Cash-Out Refinance." This allows you to pull equity to pay your ex-spouse without suffering severe cash-out interest rate penalties.
If a $100,000 buyout of your ex-spouse is set up as a standard “Cash-Out Refinance,” it carries significantly higher interest rates. As an independent Florida mortgage broker, AAA Capital Funding uses specific Fannie Mae and Freddie Mac provisions designed for divorce, allowing us to execute your buyout at much lower "Rate and Term" pricing.
The Florida Divorce Buyout Strategy
1. The Settlement Agreement
We don't need an Owelty Lien in Florida. The foundation of your buyout is your executed Marital Settlement Agreement (MSA). We use this legally binding document to prove to the lender exactly how much equity your ex-spouse is legally owed.
2. Bypassing Cash-Out Penalties
Conventional guidelines have an explicit exception for divorce. As long as the equity being pulled out is going directly to the departing spouse as dictated by the MSA, we can classify the loan as a "Limited Cash-Out," securing you a much lower interest rate.
3. The Quitclaim Deed
Simultaneous with the closing of the new refinance, the departing spouse will sign a Quitclaim Deed. This legally removes their name from the property's title while the new mortgage simultaneously removes them from the debt.
Protect Your Wealth.
Rated 4.9 stars on Google. Licensed Florida mortgage broker since 1997.
Don't let a lender unfamiliar with divorce buyouts stick you with cash-out pricing or mishandle your settlement paperwork. We'll run a confidential, line-by-line financial analysis and structure your buyout properly. Your loan stays with our Fort Lauderdale office from application to closing.
Have a question this page didn't answer?
Call 888-601-8344 and we'll answer it using your real numbers. Under ten minutes, answered 24/7. No application, no credit pull.
Text 954-816-8820 if that's easier.
AAA Capital Funding, Inc. · NMLS #374739 · Jason J. Sarji, NMLS #374700