What happens to a mortgage after a divorce?

Photo of attorney Melinda L. Singer

If you and your spouse are discussing the possibility of ending your marriage and you own a home together, it is very possible that you may have talked about one of you retaining your marital home and the other person moving out. For some people in New Jersey, this approach is taken when a divorce is initiated but eventually the plan to sell the home develops. For other people, the wish to remain in their home long-term is strong.

While there is no right or wrong way to go when it comes to staying in or leaving a home after a divorce, there are some very serious potential problems that may arise if a mortgage held in both person’s names is not properly handled. As explained by Bankrate, couples need to be very clear about the fact that their mortgage lender looks at the mortgage as separate from the house. This means that even an agreement in writing that details one person’s responsibility for the home does not negate the financial liability of the other person for the mortgage.

The spouse who wants to keep a family home should seek to get a new or refinanced mortgage in their name only. This is the only way to protect the credit and liability of the other person. If this is not possible, it may be best to consider selling the home and starting fresh with a new one.

This information is not intended to provide legal advice but is instead meant to give New Jersey residents an idea of the things they could consider regarding their mortgages if they want to keep their homes after getting divorced.

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