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

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=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?[/quote]

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.[/quote]

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.[/quote]

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.[/quote]

Wow. Not PP. That's an interesting thought that the appreciation is essentially a return on the equity. Is that really how they do it? It seems that to do a truly accurate calculation would require going month by month over the 7 year marriage and first figuring out how much principle was paid in each month then second estimating the house value to determine what fraction of the house that month's principle bought as a marriage asset -- essentially each month the principle is larger but it's also buying a chunk of a larger asset. Seems like a lot to disagree on with the way appreciation in many neighborhoods has fluctuated over the past 7 years.

I can get my mind to the idea that 1/3 of the interest paid each month is just the tax write off for the household and not part of the investment in the home, but I'm wondering about the other 2/3 of the monthly interest. Seems like that's the effective interest paid on the borrowed percentage of the homes value (that returned a much higher rate as appreciation). Is that a household investment with borrowed money or is her DH providing the house to the household at that cost because it's his name/credit/etc?

Sorry if this appears coldly analytic PP. I'm not taking sides, but it seems like there are several ways to spin it and I'm curious.

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I don't think you have to calculate the appreciation month by month, because it doesn't really matter how much the asset varied in value over time, what really matters is how much it is worth at the time of the divorce.  If the house had dropped in value, it wouldn't matter if it was worth more five years ago.  [/quote]

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