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What if my name is the only name on the mortgage?

On Behalf of | Jul 27, 2022 | Divorce

It’s not unusual for a Pennsylvania married couple to have the mortgage for the family home in the name of just one of the spouses. For instance, one spouse might have owned the home before the marriage. In another fairly common scenario, one spouse has bad credit, and so it’s easier for the other spouse to get the loan using just their own name.

Whatever the exact story behind it may be, it’s not usually a problem to have the mortgage in one spouse’s name, so long as the couple makes their mortgage payments on time. That said, things can get tricky if the couple decides to divorce.

Property division

When a married couple divorces in Pennsylvania, they must divide their marital property from any separate property and then divide the marital property between them according to state law. Pennsylvania law follows a model known as “equitable distribution,” which means, essentially, the couple must divide their assets and debts in a way that meets guidelines of fairness. In some cases, a 50-50 split might be fair, but in most cases, the division comes about through extensive negotiation. When determining a division of marital property that is equitable, the court considers eleven (11) factors.

Even if the mortgage for the family home is in only one spouse’s name, a court will typically find that the other spouse gained a property interest in it during the marriage. This is especially likely if the marriage lasted for many years, or if that spouse contributed to the mortgage payments and helped with upkeep and improvements to the property. And, contrary to popular belief, it may be true even if that spouse moved out of the home before the divorce was final.

Splitting the house

Dividing real estate in divorce can be complicated. Generally, there are two main options: The parties can sell the home and split the profit, or they can keep the home and one spouse can buy out the other’s share. In the instance of a buy out with both spouses’ names listed on a mortgage, the spouse that decides to keep the home will need to refinance the mortgage to take the other spouse’s name off.

Selling the house isn’t always easy, especially if the housing market has slowed. And, of course, selling the house means both spouses have to find new places to live. But the other option can be very complicated as well. First, the parties need to find out the fair market value of the home. One way to do this is to hire a professional appraiser to assess the home and compare it to similar properties in the area. Once they have the fair market value of the home, the parties have to decide how to divide the value between them. Depending on the circumstances, this can be quite tricky.

You’re juggling a lot of concerns when you go through divorce. It can be extremely important to have the help of an experienced attorney when deciding on how to divide your property, including real estate.

Pennsylvania Bar Association

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