If you’ve decided to end your marriage, one of the most complicated issues you’ll face is deciding what to do with your family home. However, if you took a mortgage out on your home and you’re still financing it, you will have to determine how this debt will be divided during your divorce. Please continue reading to learn how a mortgage is handled in a New York divorce and how an adept Nassau County Property Distribution Lawyer can help you navigate this complex legal process.
How is a Mortgage Divided in a New York Divorce?
Understandably, in today’s society, it can be challenging to afford the full cost of a home out of pocket. As such, many potential homeowners decide to take out a mortgage. A mortgage is a type of loan that is used to purchase property. This agreement between you and a lender allows you to borrow money to buy or refinance a home. The lender then possesses the right to take your property if you fail to repay the borrowed money plus interest. Therefore, the property serves as collateral to secure the loan.
If you took out a mortgage to purchase your home, you must determine how this financial obligation will be split between you and your former spouse. In New York, assets and debts are divided according to equitable distribution laws. This means your shared marital property will be divided equitably, not necessarily in an even 50/50 split. That said, taking out a mortgage during the marriage will be considered a marital debt. As such, you may both remain responsible for paying off the debt. Nevertheless, if the mortgage was taken out before the marriage, but both spouse’s names are on the title, it will be deemed marital property and subject to equitable distribution.
What Options Are Available?
A couple may consider a few options when deciding what will happen to their home and mortgage following their divorce. One of the most common options is to sell the house, use the proceeds to pay off their mortgage, and then split the remaining proceeds generated by the sale. If you’re not on good terms with your former spouse, this may be the best option to sever all ties.
Another option is refinancing the home to one spouse. One spouse may agree to sign away their interest in the house, and the other must then obtain a new mortgage in their name, based on their income and credit score. It’s crucial to note that you must update the house title to reflect one owner instead of two. It’s also possible to use alimony or spousal support as income to qualify to refinance their mortgage.
If you’re a homeowner going through a divorce and are concerned about your mortgage obligation, please don’t hesitate to contact a dedicated property distribution lawyer from the Law Offices of Eyal Talassazan, P.C. Our legal team is prepared to help you fight for the best outcome possible on your behalf.
