Deciding what to do about the mortgage in divorce can be tricky | Lane & Lane, LLC
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Deciding what to do about the mortgage in divorce can be tricky

When New Jersey couples consider getting divorced, one of the many dilemmas they will likely face is a decision about the family home -- especially if the mortgage is shared. The options are selling the house and each spouse keeping his or her share of the equity in the divorce settlement or for one spouse to keep the house. However, a spouse who wants to keep the house will likely need to apply for a new mortgage in his or her name.

When it is decided that one spouse will keep the house, the other spouse will naturally want to recover his or her share of the equity and be removed as mortgage holder without delay. The first step for a spouse wishing to keep the house will be to check whether he or she will qualify for a new mortgage. There are also the many ongoing expenses associated with owning a home to be considered.

In some cases, the spouse who is leaving the house will allow the staying spouse additional time to acquire the means to qualify for a mortgage. Couples may also negotiate alternative ways in which to divide other assets to compensate the spouse walking away for his or her share. Couples who have difficulties reaching agreement on how to handle their mortgages may find that a qualified divorce mediator can provide guidance through negotiations that may resolve the issues.

It is suggested that New Jersey couples address the mortgage issue in a timely manner rather than leaving it for the last moment. The guidance of an experienced divorce attorney, along with qualified mortgage professionals and divorce mediators, may be invaluable. In many cases, the divorce process can be resolved through a negotiation process rather than litigation in a court.

Source: The New York Times, "Divorce and the Shared Mortgage", Lisa Prevost, Oct. 30, 2015

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