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And so it will be when we come forth out of the grave, when the trump shall sound, and these our bodies shall rise and our spirits shall enter into them again, and they shall become living souls, no more to be dissolved or separated, but to become inseparable, immortal, eternal.
Then we shall stand before the bar of God to be judged. So says the Bible, so says the Book of Mormon, and so say the revelations which have come direct to us through the Prophet Joseph Smith.
Source: John A. Widtsoe Smith, ed. Gospel Doctrine. Salt Lake City: Deseret Book, 1919. chapter 24.
Mormons don't believe in one heaven and one hell, but in three distinct worlds or levels of glory.
Being saved by grace alone isn't enough, you also need a life filled with good works to progress to the highest levels of exaltation.