Who gets the house in a typical New Jersey divorce?

For many married couples, the home they live in represents the biggest asset they own. Most people spend thirty years of their adults lives or more paying off a mortgage on their home. Every single month adds to the equity, or amount of money you’ve paid against the principal balance of your mortgage. It’s only natural, then, that people considering a divorce in New Jersey would wonder about how the courts decide who gets the house.

Every divorce is unique and every couple’s ownership interest in their home is different, too. From the amount of equity you’ve built to the length of time you’ve lived there, there are numerous factors that impact the value of your home on both a financial level and a personal level. Still, there are certain guidelines about New Jersey divorces and marital assets that can help you understand the likely outcome as far as your home goes. The courts strive for an equitable distribution of assets, which includes your home unless there are special circumstances.

Certain special considerations can impact ownership of the home

Did you or your spouse already own the home when you married? Was it an inheritance from a family member? In these situations, the courts may consider the home to be separate property, not subject to division by the courts. This could also be the case if you executed a prenuptial agreement designating your marital home as the sole and separate property of either spouse.

Otherwise, if you both share an ownership interest in the home, the courts may look at a number of factors. Have you been able to agree to terms about who would retain the home? Do you have minor children who are accustomed to living in the home? Which spouse can maintain the mortgage and qualify for refinancing to remove the other spouse from the existing mortgage and deed? All of these factors could impact how the courts handle your home.

The amount of equity can impact the options available

For those who have only owned their home for a short period of time or those who have withdrawn much of their equity via a home equity line of credit or second mortgage, the courts may order the sale of the home. The spouses can either split the proceeds or have comparable assets assigned to one spouse to offset the income from the sale of the home. In cases where the mortgage is underwater, or the owners owe more than the home is worth, the courts may encourage the owners to work with the lender to arrange a short sale. Otherwise, the spouses may end up splitting that debt.

For homes with substantial amounts of equity, the courts could assign ownership and possession to one spouse, pending refinancing of the home. Generally, that process will involve withdrawing substantial equity to provide for the other spouse. Alternatively, the courts could award other assets, such as a well-funded retirement account, to the other spouse to offset the value represented by the house.