Typically, both parties in a marriage are named on the deed and the mortgage when they jointly own real property. However, there are some instances where only one of the two parties is responsible for paying the mortgage.
This is not a common occurrence but when it does happen, things can get complicated during their divorce. What happens to the house during our divorce? Who is entitled to what? Who will be left with debt if monthly mortgage payments are not made? Can one of us still live in the house? Do we have to refinance if so?
Find out from the noted Philadelphia divorce lawyers at the Schwartz, Fox, and Saltzman, LLC what can happen with real property ownership when both parties are on the deed but not the mortgage. If you are considering getting divorced and have this problem, give us a call. Put our over 50 years of experience to work for you and get the best outcome possible.
Your Rights if Your Name is on a Deed but Not the Mortgage
This may lead some people to ask the question; “what are my rights if my name is on a deed but not the mortgage?”
If your name is on the deed, you have an ownership interest in the home. The nature of that ownership interest will be set forth on the deed itself. In Pennsylvania, people can own real property in the following ways:
- Sole ownership
- Joint tenants
- Joint tenants with right of survivorship
Married couples generally own their real property as tenants-by-the-entireties. This means that their interest in the property is indivisible and if one spouse dies, their interest in the property automatically passes to the surviving spouse. In other words, if your name is on the deed, you are tenants-by-the-entireties, and if one of you dies, the other owns the property entirely.
If you are not on the mortgage for whatever reason, you are not liable for paying the mortgage loan. That said, you get your spouse’s interest in the property if they die. However, if you default on mortgage payments, the mortgage lender has the power to foreclose on the home and evict you.
Determining Who Owns Your Home
Whoever is listed on the deed as the property owner or owners owns the home according to the type of ownership interest they elected when they bought the property. However, the mortgage lender has a secured interest in the property and can take action against the property (foreclosure) and sometimes also the mortgagee if the mortgage is not paid as agreed.
For the purposes of property settlement, the people listed on the deed own the home, but there are additional steps to either divide the equity in the home or determine what happens if one party wants to remain in the family home. Divorcing couples in PA generally choose one of these options:
- Sell the property and divide the proceeds according to their interests in other marital assets and the property settlement agreement;
- Refinance the property in the name of the spouse that will reside there, the other spouse to execute a quitclaim deed;
- Continue to pay the mortgage with one spouse residing in the property, no change in mortgage or deed.
Frequently the parent with primary custody of the children of the marriage will continue to reside in the marital home to keep the children in the same school district, while the other parent will contribute to the mortgage in the form of court-ordered support.
In the case of refinancing, the quitclaim deed releases ownership for the non-residing spouse.
What Happens If Your Spouse Is Not On the Mortgage
If your spouse is not on the mortgage, they are not responsible for paying it. However, the mortgage lender can foreclose on the house if the mortgage is not paid.
Mortgage Holder vs Title Holder
Ownership of real estate property is attained through transfer of the title deed. Ownership of vehicles such as cars and boats is attained through transfer of title.
If you owe money on a vehicle loan, you do not have the title to the vehicle. Instead, the lender retains the title to the vehicle until the loan is paid off. If you want to sell your vehicle, you cannot do so until you pay off the vehicle loan and obtain the title from the lender.
In contrast, if you owe money on a mortgage, you do have the deed but the mortgage company has a lien on your property. You can sell your real property without satisfying those liens until the sale takes place, at which all liens are paid from the seller’s payment and you receive the remainder.
Is Your Spouse Entitled to Half of Your House If It’s In Your Name?
Your spouse may be entitled to half of your house in the final divorce decree even if it’s under your name. It depends upon your unique financial situation as a married couple.
Pennsylvania is an equitable distribution state, not a community property state, meaning divorcing parties do not necessarily get “equal” shares of the marital assets, they receive an “equitable” or fair portion.
Talk with an Experienced Divorce Attorney
Real property is usually a couple’s greatest marital asset. How it is dealt with in the divorce process might be one of the most important financial decisions a couple makes, along with how pensions are divided and whether continuing financial support is necessary.
We have the experience to help you get what you deserve in your property settlement agreement, including your real property regardless of who is on the deed and who is on the mortgage. Call us at 215-967-9070 and put our over fifty years of experience with Pennsylvania family law to work for you. We can help you get the arrangements that are best for your family, including child custody, child support, spousal support, and marital property division, especially for high asset couples who are divorcing.