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What happens to the mortgage when you divorce?

On Behalf of | Jan 4, 2021 | Property Division

When your New Jersey marriage comes to an end, you need to figure out what to do with your shared assets and debts so that you may move forward with life on your own. If you and your one-time partner share a home and mortgage with one another, you must determine what to do with what may well be one of your most valuable assets.

According to Bankrate, the options you have when it comes to your mortgage may vary based on how much equity you have in your home and whether either of you want to keep it, among other considerations.

If you both want to move

If neither you nor your ex wants to stay in your once-shared home or if neither of you can afford to do so, you may want to put it on the market. You may use the profits made on the sale to pay off the mortgage, and then the two of you may split anything that remains from the sale.

If one of you wants to keep the home

In the event that you or your ex wants to stay in the home while the other party vacates it, you may need to refinance the mortgage to pay off the other and eliminate the name of the party who does not want to stay. If you decide to proceed down this route, you may also need to update the title for the home so that it is in one name, only.

Keep in mind that making changes to your mortgage may have tax or credit implications. The more you understand about how selling your home or refinancing the mortgage may affect you, the better.