After years of working and saving, it can be difficult to deal with the idea that a soon-to-be-ex spouse is entitled to at least half of everything you accumulated since your wedding. You may be accustomed to thinking of the assets and debts in your name as yours, but the law views the marital estate as the collective property of the marriage. This includes houses and mortgages in your name solely.
Marital Property and Debt Division In General
Marital property and debt division law varies from state to state, but some features remain fairly universal across all jurisdictions. In general, marital property and debt consists of all items acquired by either of you between the date of marriage and the date of separation. Some states use the date of divorce or another important date to mark the end of your marital estate, so consult with a family law attorney in your area to learn the specifics of your state's law. The fact that a house or mortgage appears in your name solely doesn't affect its classification as marital or separate. As such, a court can assign both the house and debt to the other side.
Former Marital Residence In Divorce
Exactly what happens to the former marital home in divorce will depend upon the state. In some community property states, the home may have to be sold and the proceeds divided equally, unless you agree otherwise. In equitable distribution states--which constitute the majority--the home becomes part of the larger estate whose value can be distributed intact as part of an equitable division. If you owned the home before marriage but made payments on it during the marriage, the home will be a mixed asset, consisting of both marital and separate components. A court will only divide the marital component.
Mortgages In Divorce
Having a mortgage in your name when you're not living in the house can be a problem in that it shows up on your credit report as a liability until it gets paid off or refinanced by someone else. Because of this, judges are unlikely to distribute a house to your ex and let the mortgage stay in your name until she pays it off. While you are free to agree to this, letting your ex simply assume the mortgage will make it difficult for you to get another home loan at the same time. It will also endanger your credit, as any missed payments will be your problem, not hers.
Refinance and Sale
If a home, a mortgage or both are in one party's name solely and it appears appropriate to distribute the equity either partially or entirely to the other, there are better ways to achieve that than having your ex assume the mortgage. You need to get your name off the loan as soon as practical. If possible, your ex should refinance the debt into her name solely. If she doesn't qualify for a refinance, sell the house. Mortgages tend to last for a while; you don't want it in your name any longer than necessary.