Calculating how much to claim for portion of house value during divorce

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do an appraisal, divide in half

no. take the equity now - the equity when married, divide by 2.

This. You are comparing past to present equity.

[Anonymous]

Did you pay anything to the mortgage or help wit the repairs?

[Anonymous]

Two things:

one, anything you paid prior to marriage doesn't count. Take it right off the table and don't even bother with that argument. It was rent at best.

second, you say that "marital funds" were used to pay down the mortgage. What exactly do you mean by that? Because unless you are in a community property state, his income is his and yours is yours. How much did you, specifically, pay toward the mortgage? This might be hard to figure out given most of us pay out of a pot of money. So then you'd need to look at your income ratio. If you each made 50% of the total household income, assume you paid 50% of the mortgage, then I would say argue for 50% of the appreciation since the date of marriage. If it's more or less, go that route. Caveat of the total household income approach would be if either spouse was paying significant pre-marital debts or making other non-marital transfers out of income, you'd need to deduct for that.

[Anonymous]

Anonymous wrote:Two things:

one, anything you paid prior to marriage doesn't count. Take it right off the table and don't even bother with that argument. It was rent at best.

second, you say that "marital funds" were used to pay down the mortgage. What exactly do you mean by that? Because unless you are in a community property state, his income is his and yours is yours. How much did you, specifically, pay toward the mortgage? This might be hard to figure out given most of us pay out of a pot of money. So then you'd need to look at your income ratio. If you each made 50% of the total household income, assume you paid 50% of the mortgage, then I would say argue for 50% of the appreciation since the date of marriage. If it's more or less, go that route. Caveat of the total household income approach would be if either spouse was paying significant pre-marital debts or making other non-marital transfers out of income, you'd need to deduct for that.

First paragraph is right, second paragraph is wrong.

You can't simple take the increase in the fair market value from date of marriage to date of separation and divide by two, because the increase in value attributed to his premarital contributions are his alone. If, however, he will agree to doing it that way, regardless of the law, get it in writing in an agreement ASAP.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Two things:

one, anything you paid prior to marriage doesn't count. Take it right off the table and don't even bother with that argument. It was rent at best.

second, you say that "marital funds" were used to pay down the mortgage. What exactly do you mean by that? Because unless you are in a community property state, his income is his and yours is yours. How much did you, specifically, pay toward the mortgage? This might be hard to figure out given most of us pay out of a pot of money. So then you'd need to look at your income ratio. If you each made 50% of the total household income, assume you paid 50% of the mortgage, then I would say argue for 50% of the appreciation since the date of marriage. If it's more or less, go that route. Caveat of the total household income approach would be if either spouse was paying significant pre-marital debts or making other non-marital transfers out of income, you'd need to deduct for that.

First paragraph is right, second paragraph is wrong.

You can't simple take the increase in the fair market value from date of marriage to date of separation and divide by two, because the increase in value attributed to his premarital contributions are his alone. If, however, he will agree to doing it that way, regardless of the law, get it in writing in an agreement ASAP.

Oh, also, mortgage payments during the marriage don't give you a dollar for dollar credit back in equity. Only the reduction of the principal amount of the loan are what matter. So if PITI was $1500/mo and of that, $158 went towards principal (not interest, taxes or insurance), the marital interest is $158 that month, plus the marital share of the passive increase of the fair mkt value of the home.

[Anonymous]

Well, I'm not a lawyer, but I thought it's 50/50 unless he did something to protect his assets before he married.

[Anonymous]

OP here. I don't have any of the mortgage documents and it may take a long while to get access to them. Is there some decent way to at least come up with a rough estimate of how much equity would have been paid down between year X and year Y? I know the initial purchase price, I am guessing the down payment amount was about 20%. I also know how the house value changed over time, and roughly what the monthly mortgage payment was. I think it is a 30-year mortgage, like most mortgages. I can probably look up historical interest rates and take a guess at the interest rate too.

Does it make sense that I can come up with a reasonable rough figure by plugging all that into some formula, or are there just too many unknowns?

[Anonymous]

Anonymous wrote:OP here. I don't have any of the mortgage documents and it may take a long while to get access to them. Is there some decent way to at least come up with a rough estimate of how much equity would have been paid down between year X and year Y? I know the initial purchase price, I am guessing the down payment amount was about 20%. I also know how the house value changed over time, and roughly what the monthly mortgage payment was. I think it is a 30-year mortgage, like most mortgages. I can probably look up historical interest rates and take a guess at the interest rate too.

Does it make sense that I can come up with a reasonable rough figure by plugging all that into some formula, or are there just too many unknowns?

I mean, the obvious answer would be to run an amortization table right? Also, I agree with the previous posters that you would only be entitled to a % of the total appreciation based upon the equity you contributed. That portion of the appreciation attributable to his pre-marriage ownership interest would be his.

[Anonymous]

I can't believe people are telling OP to walk away and not fight for heror his half of the appreciation for the last 7 years. If the house appreciated 400 thousand in the past 7 years she or he should get half. She/He lost an opportunity to purchase a house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. I don't have any of the mortgage documents and it may take a long while to get access to them. Is there some decent way to at least come up with a rough estimate of how much equity would have been paid down between year X and year Y? I know the initial purchase price, I am guessing the down payment amount was about 20%. I also know how the house value changed over time, and roughly what the monthly mortgage payment was. I think it is a 30-year mortgage, like most mortgages. I can probably look up historical interest rates and take a guess at the interest rate too.

Does it make sense that I can come up with a reasonable rough figure by plugging all that into some formula, or are there just too many unknowns?

I mean, the obvious answer would be to run an amortization table right? Also, I agree with the previous posters that you would only be entitled to a % of the total appreciation based upon the equity you contributed. That portion of the appreciation attributable to his pre-marriage ownership interest would be his.

Why? Appreciation on a house has nothing to do with the amount of equity in a house. I am not OP, just think it is an interesting question. Why should now much equity in a house matter for purposes of appreciation. If I buy a house for 500k and put down 10% and sell the house 7 years later for 900 k, I get that 400k. I don't get 10% plus how much ever equity I have paid the bank.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. I don't have any of the mortgage documents and it may take a long while to get access to them. Is there some decent way to at least come up with a rough estimate of how much equity would have been paid down between year X and year Y? I know the initial purchase price, I am guessing the down payment amount was about 20%. I also know how the house value changed over time, and roughly what the monthly mortgage payment was. I think it is a 30-year mortgage, like most mortgages. I can probably look up historical interest rates and take a guess at the interest rate too.

Does it make sense that I can come up with a reasonable rough figure by plugging all that into some formula, or are there just too many unknowns?

I mean, the obvious answer would be to run an amortization table right? Also, I agree with the previous posters that you would only be entitled to a % of the total appreciation based upon the equity you contributed. That portion of the appreciation attributable to his pre-marriage ownership interest would be his.

Why? Appreciation on a house has nothing to do with the amount of equity in a house. I am not OP, just think it is an interesting question. Why should now much equity in a house matter for purposes of appreciation. If I buy a house for 500k and put down 10% and sell the house 7 years later for 900 k, I get that 400k. I don't get 10% plus how much ever equity I have paid the bank.

Because if he owned the house 100% he would be entitled to all of the appreciation so you have to split out that portion of the appreciation attributable to his pre-marital interest. The example you provided is inapplicable for numerous reasons.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. I don't have any of the mortgage documents and it may take a long while to get access to them. Is there some decent way to at least come up with a rough estimate of how much equity would have been paid down between year X and year Y? I know the initial purchase price, I am guessing the down payment amount was about 20%. I also know how the house value changed over time, and roughly what the monthly mortgage payment was. I think it is a 30-year mortgage, like most mortgages. I can probably look up historical interest rates and take a guess at the interest rate too.

Does it make sense that I can come up with a reasonable rough figure by plugging all that into some formula, or are there just too many unknowns?

I mean, the obvious answer would be to run an amortization table right? Also, I agree with the previous posters that you would only be entitled to a % of the total appreciation based upon the equity you contributed. That portion of the appreciation attributable to his pre-marriage ownership interest would be his.

Why? Appreciation on a house has nothing to do with the amount of equity in a house. I am not OP, just think it is an interesting question. Why should now much equity in a house matter for purposes of appreciation. If I buy a house for 500k and put down 10% and sell the house 7 years later for 900 k, I get that 400k. I don't get 10% plus how much ever equity I have paid the bank.

Because if he owned the house 100% prior to the marriage he would be entitled to all of the appreciation so you have to split out that portion of the appreciation attributable to his pre-marital interest. The example you provided is inapplicable for numerous reasons.

PP here, sorry, edited to clarify.

[Anonymous]

Anonymous wrote:Well, I'm not a lawyer, but I thought it's 50/50 unless he did something to protect his assets before he married.

He did--her name is not on the asset!

[Anonymous]

Anonymous wrote:I can't believe people are telling OP to walk away and not fight for heror his half of the appreciation for the last 7 years. If the house appreciated 400 thousand in the past 7 years she or he should get half. She/He lost an opportunity to purchase a house.

Because she might not be entitled to half. Her name is not on this asset. That's why she's in this mess to start with.

[Anonymous]

OP still hasn't answered by how much her husband out earned her. I'm thinking she didn't pay much, if anything, toward the mortgage on this property. If I were her Ex, I'd fight to the death.