Calculating how much to claim for portion of house value during divorce
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Anonymous
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The house was purchased by STBX before the marriage, so my name is not on the title. However, STBX used marital income to pay down the mortgage during the marriage. My lawyer has told me that I therefore have a legal stake in the house.
To come up with an equitable amount for this in the divorce settlement, would you base it on appreciation of the house (substantial) during the marriage, or on how much of the mortgage was paid down during that time? I can easily calculate the former by looking at neighborhood home prices online, but it might take a long time to get access to the records to figure out the latter. Is there any relatively easy way for me to estimate how much of the mortgage would have been paid down, without having access to all the mortgage documents? I can look up the initial home sale price and I know roughly how much the monthly mortgage payments were, but I'm not sure about the interest rates or mortgage terms, etc. FWIW, while we were living together in the house, but before we got married, I paid rent to STBX (which ultimately went toward mortgage payments during those years). I also contributed a lot of time, labor and money to home renovations before we were married. |
Anonymous
| How long were you married? |
Anonymous
| Same with me. Walk away- it's just stuff and not worth it. A percentage of a portion of a single asset? Life's too short. |
Anonymous
+1 Went through this a decade ago with my now ex. Just not worth it. We started down this path of trying to get as much money as we each could out of it. Then ultimately, when the raw anger started to subside, we came up with a much better approach that didn't get into valuing and calculating every single item we had. I can say a decade later, I'm so glad we stopped this path when we did. |
Anonymous
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How long has he owned the house, how much of his own pre-marital money went into it (down payment, mortgage payments, repairs & maintenance) before you got married? Estimate how much equity he had in the house before marriage percentage-wise, increase it by a reasonable amount for any pre-marital repairs and maintenance. That would be his undivisible share of the house. The remaining percentage split it in half and that might give you a reasonable estimate of your share.
For example, let's say he had 30% equity in the house by the time you got married. If he put in a significant amount of money in upgrades before marriage, add some percentage points that are proportional ... let's say it was enough to raise his stake to 40% of the house value. The remaining 60% of the current equity is marital and you get half of that. Let's say you currently have $300k equity. $120k is his;$180k is joint. Half of $180k = $90k out of $300k equity is your share. |
Anonymous
| The fairest way in my opinion would be to come up with a value for the equity in the house when you got married and the equity in the house now and split it 50/50. Whether the equity is from property appreciation or from paying down the marriage with joint funds doesn't really make much different in my opinion. |
Anonymous
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OP here. It's the only asset we're dividing, other than retirement funds, and it's a big one. I'm not going to just walk away from several hundred thousand dollars when I have no other major assets to my name and gave up a plan to buy another property in the same area when STBX and I got together. I don't want to waste our time calculating down to the dollar, which is why I want to figure out the simplest way to put some reasonable number to it, even if it turns out to be a low estimate.
We were married seven years. |
Anonymous
| Do an appraisal, divide in half |
Anonymous
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I'd probably do it like this. Say he had $100K of equity when you moved in. Say the mortgage was $2,000/mo and he paid $1,200 and you paid $800. Say you had this arrangement for 5 years, or 60 months.
Say, also, he used $50K of marital money to pay down the mortgage - $25K was yours, $25K was his. What he's put into the house would be $100K + $72,000 ($1,200x60) + $25K. What you put into the house would be $0K + $48K ($800x60) + $25K. Of the total $270K put into the house, his share is 73%; yours is 27%. Multiply that percentage by the estimated net value of the house if it were to sell (Sale price less transaction fees) - let's say that would be $500K. You'd walk away with 27% x $500K = $135,185. Which is a gain on your initial $73K investment. |
Anonymous
no. take the equity now - the equity when married, divide by 2. |
Anonymous
| I would think a mediator has a way of figuring this amount. |
Anonymous
Zero info in post on gender. Another sexist micro aggression assuming the STBX is male. |
Anonymous
Seven years? I would not bother. Just chalk it up to rent. |
Anonymous
| Wouldn't the next logical question to ask your lawyer to be how best to value your claim in the house? |
Anonymous
OP here. Not sure why you say that? The house appreciated a lot in that time. And my lawyer didn't recommend a specific path. I feel like it is up to me to figure out the best way to do it. |