Owning a home with your spouse in New Jersey is sometimes complex when you choose to end your marriage. If you have a home equity loan, there are ways you can protect it while getting a divorce.
Determine how much home equity you have
Before your divorce is final, determine the value of your home equity. One way to find out is to have a home appraisal and get a detailed report showing the amount of equity in your home. Another option is having a real estate agent prepare a market analysis report by comparing the sales of homes in your area.
Decide who will get the home
Many divorcing couples decide that one spouse will keep the marital home. However, this is only practical when it’s possible to make monthly payments toward the mortgage and pay for necessary home repairs. There may also be leftover equity after the divorce, which means the party might have to buy out their former spouse’s portion.
Determine how to split the equity
New Jersey is an equitable distribution state, which means that when a property is divided during a divorce, it’s done in a way that’s fair. This doesn’t necessarily mean a 50/50 split on all property. This division also takes into account the value of your equity home loan. You and your spouse could decide how it should be split, but if you are unable to reach an agreement, the judge might do it for you.
See if you refinance or if you have to sell
Getting a refinance divorce buyout may be necessary if you plan to keep the home. If you can’t afford to refinance, you might have to sell to protect against a possible foreclosure. If this is the case, decide if selling the home is, indeed, your best option.