What happens with mortgage after divorce in PA?

[Bjagd02]

My marriage is on the rocks. I want it to work out, but also want to be prepared for the worst. I bought a house in 2013 and got married 3 months later. So, the deed and mortgage are in my name only. We got a heloc a year later which I believe is in both our names. If we are to divorce, what happens? Is the mortgage split now that we have a joint heloc? How would each of us benefit from the situation? Thanks

 

[LdiJ]

My marriage is on the rocks. I want it to work out, but also want to be prepared for the worst. I bought a house in 2013 and got married 3 months later. So, the deed and mortgage are in my name only. We got a heloc a year later which I believe is in both our names. If we are to divorce, what happens? Is the mortgage split now that we have a joint heloc? How would each of us benefit from the situation? Thanks

Whoever keeps an asset, also keeps the debt associated with that asset. Your spouse would be entitled to 1/2 of any equity/appreciation gained during the marriage. Depending on what the equity loan paid for, there is a slight chance that some of the equity loan could be assigned your spouse's side of the property division, but likely not as your spouse paying it directly, but rather as your spouse trading it for something else.

 

[Bjagd02]

Thanks for the reply. So if the house is worth 25K more than it was when we got married, she would get half of that upon selling? I'm not against that, just want to make sure I understand. Also, the heloc was used to replace the kitchen and other home improvements.

 

[LdiJ]

Thanks for the reply. So if the house is worth 25K more than it was when we got married, she would get half of that upon selling? I'm not against that, just want to make sure I understand. Also, the heloc was used to replace the kitchen and other home improvements.

Are you going to sell immediately? If not, then you are going to have to refinance for enough to pay off the equity loan and pay out her half of the 25k. You cannot leave her credit tied up in your house.