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    • Rheys99
    • By Rheys99 3rd Dec 17, 10:46 PM
    • 17Posts
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    Rheys99
    Tenants in Common share calculator
    • #1
    • 3rd Dec 17, 10:46 PM
    Tenants in Common share calculator 3rd Dec 17 at 10:46 PM
    Hi all

    I currently own a house with my ex partner. Completely amicable breakup and he plans to move out before Christmas into a friends house. We bought a house a few years back for 227,000 (34,000 deposit- 25,000 me and 9,000 him). He is happy to leave the house with his 9,000 and that be the end of it.

    My friend is then going to take on his half of the mortgage and own part of the house through tenants in common and we will have unequal shares to reflect how much we have put in.

    The house has been revalued at 240,000 recently (increase of 13,000) and there is 187,000 left to pay on the mortgage. So, that means essentially, 53,000 in equity which I am 'entitled to' if we (my friend and I) were to ever sell the property together.
    My friend will be adding 9,000 is her 'deposit' to the house. Which then means I an entitled to 44,000 and my friend 9,000(?).
    That then equates to 88% and 12% ownership shares of the entire house. Does that sound right? What ever is left over after a house sale, we would split 50% 50%...
    So if the house sold for 300,000 down the line, I would get 53,000 and her 9000 and the other 238,000 would be split 50/50 ( 119k each).
    These are the % we are planning on having written into the land registery and a dead of trust.
    Can anyone see anywhere where I have gone wrong? Know of any issues this might cause? Have any general advise or pointers?

    Thanks so much
    R
Page 1
    • gettingtheresometime
    • By gettingtheresometime 3rd Dec 17, 10:59 PM
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    gettingtheresometime
    • #2
    • 3rd Dec 17, 10:59 PM
    • #2
    • 3rd Dec 17, 10:59 PM
    House valves at 240K
    Current mortgage 187K
    Your equity at moment - 44K (assuming 9K introduced by friend is used to pay off ex)

    So at 240K valuation you own 18% & friend owns 4%, assuming mortgage etc is split 50:50.

    If mortgage etc is split 50:50 I’d say you’d own 57% nd your friend 43%

    In your example of selling at 300K, you’d get your 44k equity, your friend would get 9k and you’d split 247k.

    Rather than set amounts why don’t think of the %ages that the deposit represents especially if every thing else is split down the middle
    Last edited by gettingtheresometime; 03-12-2017 at 11:14 PM.
    Lloyds OD / Natwest OD / PO CC / Wescott / Argos Card cleared thanks to the 1 debt v 100 day challenge


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    • paddedjohn
    • By paddedjohn 3rd Dec 17, 11:01 PM
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    paddedjohn
    • #3
    • 3rd Dec 17, 11:01 PM
    • #3
    • 3rd Dec 17, 11:01 PM
    Have you spoke to your mortgage company yet or are these 'back of a fag packet plans'?
    Be Alert..........Britain needs lerts.
    • Rheys99
    • By Rheys99 3rd Dec 17, 11:01 PM
    • 17 Posts
    • 1 Thanks
    Rheys99
    • #4
    • 3rd Dec 17, 11:01 PM
    • #4
    • 3rd Dec 17, 11:01 PM
    Thanks so much!
    • Rheys99
    • By Rheys99 3rd Dec 17, 11:03 PM
    • 17 Posts
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    Rheys99
    • #5
    • 3rd Dec 17, 11:03 PM
    • #5
    • 3rd Dec 17, 11:03 PM
    Lender spoken too and all set in motion.... just need details for deed of trust etc.
    • paddedjohn
    • By paddedjohn 3rd Dec 17, 11:23 PM
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    paddedjohn
    • #6
    • 3rd Dec 17, 11:23 PM
    • #6
    • 3rd Dec 17, 11:23 PM
    House valves at 240K
    Current mortgage 187K
    Your equity at moment - 44K (assuming 9K introduced by friend is used to pay off ex)

    So at 240K valuation you own 18% & friend owns 4%, assuming mortgage etc is split 50:50.

    If mortgage etc is split 50:50 Id say youd own 57% nd your friend 43%

    In your example of selling at 300K, youd get your 44k equity, your friend would get 9k and youd split 247k.

    Rather than set amounts why dont think of the %ages that the deposit represents especially if every thing else is split down the middle
    Originally posted by gettingtheresometime
    Was just about to pull you on your figures but noticed you have edited 😉😉
    Be Alert..........Britain needs lerts.
    • getmore4less
    • By getmore4less 3rd Dec 17, 11:24 PM
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    getmore4less
    • #7
    • 3rd Dec 17, 11:24 PM
    • #7
    • 3rd Dec 17, 11:24 PM
    227,000 34,000 deposit- 25,000 me and 9,000 him). He is happy to leave the house with his 9,000 and that be the end of it.

    if he is happy with 9k and has been paying half the mortgage you have got off lightly, he is not even asking for the 3k he paid off the mortgage or his share of the increase in value.


    My friend is then going to take on his half of the mortgage and own part of the house through tenants in common and we will have unequal shares to reflect how much we have put in.

    The house has been revalued at 240,000 recently (increase of 13,000) and there is 187,000 left to pay on the mortgage.



    you each own 1/2 the mortgage 93,500 + deposits

    if they are sticking in 9k that's 102,500 or 42.7% you 137,500 have 57.3%

    on sale you split at those % and then pay off your share of the debt hats left.
    Last edited by getmore4less; 03-12-2017 at 11:34 PM.
    • getmore4less
    • By getmore4less 3rd Dec 17, 11:37 PM
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    getmore4less
    • #8
    • 3rd Dec 17, 11:37 PM
    • #8
    • 3rd Dec 17, 11:37 PM
    House valves at 240K
    Current mortgage 187K
    Your equity at moment - 44K (assuming 9K introduced by friend is used to pay off ex)

    So at 240K valuation you own 18% & friend owns 4%, assuming mortgage etc is split 50:50.

    If mortgage etc is split 50:50 Id say youd own 57% nd your friend 43%

    In your example of selling at 300K, youd get your 44k equity, your friend would get 9k and youd split 247k.

    Rather than set amounts why dont think of the %ages that the deposit represents especially if every thing else is split down the middle
    Originally posted by gettingtheresometime

    You split first then pay of the debt, you don't get your deposits back first.
    • Tom99
    • By Tom99 4th Dec 17, 12:46 AM
    • 658 Posts
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    Tom99
    • #9
    • 4th Dec 17, 12:46 AM
    • #9
    • 4th Dec 17, 12:46 AM
    The deed of trust needs to reflect the unequal deposit but equal mortgage payment so it will never be a straight %age equity share as that will move over time. The deed needs to be worded something like this:-

    The parties hereto declare that they hold the Property on a trust of land to the parties herewith DELCARE that they hold the property and the proceeds of sale (after discharging the mortgage and deducting there-from the costs of sale) and the net rents and profits until sale UPON TRUST for themselves as Tenants in Common:-

    • 18.33% (44/240) of the gross sale price of the Property less costs and fees for Partner A
    • 3.75% (9/240) of the gross sale price of the Property less costs and fees for Partner B
    • The remainder split 50%/50% between A and B

    Using the above formula you can see how the equity split between A and B will move over time in the examples below:-

    Day 2 Value 240 less mortgage 187 = equity 53
    A = 18.33% x 240 + 50% x 0 = 44
    B = 3.75% x 240 + 50% x 0 = 9
    So the 53 equity is split A 83% and B 17%

    Year 5 Value 300 less mortgage say 160 = equity 140
    A = 18.33% x 300 + 50% x 73.75 = 92
    B = 3.75% x 300 + 50% x 73.75 = 48
    So the 140 equity is split A 66% and B 34%

    Year 20 Value 400 less mortgage 0 = equity 400
    A = 18.33% x 400 + 50% x 312 = 229
    B = 3.75% x 400 + 50% x 312 = 171
    So the 400 equity is split A 57% and B 43%

    You can see how B's equity share moves from 17% to 43% over time as the mortgage is repaid and value increases. Once the mortgage has been repaid the split will always be 57%/43% no matter what the value.
    Last edited by Tom99; 04-12-2017 at 3:54 AM.
    • Rheys99
    • By Rheys99 4th Dec 17, 8:24 AM
    • 17 Posts
    • 1 Thanks
    Rheys99
    You split first then pay of the debt, you don't get your deposits back first.
    Originally posted by getmore4less
    Hi
    Thanks so much for the reply..

    What do you mean by you split the debt first?
    • Rheys99
    • By Rheys99 4th Dec 17, 8:28 AM
    • 17 Posts
    • 1 Thanks
    Rheys99
    The deed of trust needs to reflect the unequal deposit but equal mortgage payment so it will never be a straight %age equity share as that will move over time. The deed needs to be worded something like this:-

    The parties hereto declare that they hold the Property on a trust of land to the parties herewith DELCARE that they hold the property and the proceeds of sale (after discharging the mortgage and deducting there-from the costs of sale) and the net rents and profits until sale UPON TRUST for themselves as Tenants in Common:-

    • 18.33% (44/240) of the gross sale price of the Property less costs and fees for Partner A
    • 3.75% (9/240) of the gross sale price of the Property less costs and fees for Partner B
    • The remainder split 50%/50% between A and B

    Using the above formula you can see how the equity split between A and B will move over time in the examples below:-

    Day 2 Value 240 less mortgage 187 = equity 53
    A = 18.33% x 240 + 50% x 0 = 44
    B = 3.75% x 240 + 50% x 0 = 9
    So the 53 equity is split A 83% and B 17%

    Year 5 Value 300 less mortgage say 160 = equity 140
    A = 18.33% x 300 + 50% x 73.75 = 92
    B = 3.75% x 300 + 50% x 73.75 = 48
    So the 140 equity is split A 66% and B 34%

    Year 20 Value 400 less mortgage 0 = equity 400
    A = 18.33% x 400 + 50% x 312 = 229
    B = 3.75% x 400 + 50% x 312 = 171
    So the 400 equity is split A 57% and B 43%

    You can see how B's equity share moves from 17% to 43% over time as the mortgage is repaid and value increases. Once the mortgage has been repaid the split will always be 57%/43% no matter what the value.
    Originally posted by Tom99


    Wow... thank you so much for taking the time to figure this out for me.
    So am i right in saying that... by adding this clause in the deed, it will mean that we will get our deposits back (with me getting the additional equity increase at the property has risen from 227k to 240k since the time I have owned it without my friend). It will also take into account that both % will differ as we pay more and more off the mortgage?

    Thanks again
    • Rheys99
    • By Rheys99 4th Dec 17, 8:35 AM
    • 17 Posts
    • 1 Thanks
    Rheys99
    227,000 34,000 deposit- 25,000 me and 9,000 him). He is happy to leave the house with his 9,000 and that be the end of it.

    if he is happy with 9k and has been paying half the mortgage you have got off lightly, he is not even asking for the 3k he paid off the mortgage or his share of the increase in value.


    My friend is then going to take on his half of the mortgage and own part of the house through tenants in common and we will have unequal shares to reflect how much we have put in.

    The house has been revalued at 240,000 recently (increase of 13,000) and there is 187,000 left to pay on the mortgage.



    you each own 1/2 the mortgage 93,500 + deposits

    if they are sticking in 9k that's 102,500 or 42.7% you 137,500 have 57.3%

    on sale you split at those % and then pay off your share of the debt hats left.
    Originally posted by getmore4less


    1. Yes he's happy with 9k... the reason the house has increase so much in value is due to refurbishments that I have paid for.

    2. am i right with saying that if we went for 42.7% and 57.3% that would mean that what ever sale price of the house, i would take away 57.3%. The only thing i worry about is that we are hoping to carry about a loft conversion on the house next year and therefore i need a %/clause in the deed which states that any increased equity AFTER 240K should be split 50/50... not sure how i do that!

    Thanks again
    • Tom99
    • By Tom99 4th Dec 17, 9:03 AM
    • 658 Posts
    • 395 Thanks
    Tom99
    1. Yes he's happy with 9k... the reason the house has increase so much in value is due to refurbishments that I have paid for.

    2. am i right with saying that if we went for 42.7% and 57.3% that would mean that what ever sale price of the house, i would take away 57.3%. The only thing i worry about is that we are hoping to carry about a loft conversion on the house next year and therefore i need a %/clause in the deed which states that any increased equity AFTER 240K should be split 50/50... not sure how i do that!

    Thanks again
    Originally posted by Rheys99
    It is only a 57%/43% split of the equity when the mortgage has been paid off, until then the %age will be different. If you share improvement expenditure 50/50 in the future its a bit like increasing your initial deposits, you could try and incorporate a clause which covered that in the initial DOT or just revise the DOT when you know more about the loft extension.


    Such a clause could get quite complicated, say you extend in 5 yrs time when the house has already go up in value 30%, you may need to agree a value for the house just before you extend.
    • gettingtheresometime
    • By gettingtheresometime 4th Dec 17, 9:40 AM
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    gettingtheresometime
    Wow... thank you so much for taking the time to figure this out for me.
    So am i right in saying that... by adding this clause in the deed, it will mean that we will get our deposits back (with me getting the additional equity increase at the property has risen from 227k to 240k since the time I have owned it without my friend). It will also take into account that both % will differ as we pay more and more off the mortgage?

    Thanks again
    Originally posted by Rheys99
    I think you're overthinking this.


    Imagine if you sold your current property & you and your ex went your separate ways , you with 44K and your ex with 9k (assuming there were no costs)


    You and your friend then buy another house for 240k with you putting in your 44K and your friend their 9K.


    You own 18% of the house at that point, your friend 4%.


    Wouldn't it be easier to say that the deposit equates to these percentages and then everything after that is split down the middle assuming payments for mortgages, maintenance etc are split as well?
    Lloyds OD / Natwest OD / PO CC / Wescott / Argos Card cleared thanks to the 1 debt v 100 day challenge


    Next on the list - JD Williams
    • Rheys99
    • By Rheys99 4th Dec 17, 9:44 AM
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    • 1 Thanks
    Rheys99
    I think you're overthinking this.


    Imagine if you sold your current property & you and your ex went your separate ways , you with 44K and your ex with 9k (assuming there were no costs)


    You and your friend then buy another house for 240k with you putting in your 44K and your friend their 9K.


    You own 18% of the house at that point, your friend 4%.


    Wouldn't it be easier to say that the deposit equates to these percentages and then everything after that is split down the middle assuming payments for mortgages, maintenance etc are split as well?
    Originally posted by gettingtheresometime

    you're right- i think i am!

    Yep- your last sentence makes a lot of sense. Thank you!
    • getmore4less
    • By getmore4less 4th Dec 17, 9:47 AM
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    getmore4less
    Hi
    Thanks so much for the reply..

    What do you mean by you split the debt first?
    Originally posted by Rheys99

    The ownership is 57.3% 42.7%

    if you sell then the proceeds BEFORE taking of the mortgage are split at that %.

    THEN you pay off your share of the mortgage from that share

    (it ends up the same as the way Tom is doing it but his is far more complicated.)


    I find it much easier to ignore the free equity and just think of it as how much of the house do I own and how much of the debt do I need to pay.

    makes for a much simpler calculation and makes unequal overpayments very easy to do as you just change the debt owed and can leave the share of the house constant.
    Last edited by getmore4less; 04-12-2017 at 10:05 AM.
    • getmore4less
    • By getmore4less 4th Dec 17, 9:51 AM
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    getmore4less
    you're right- i think i am!

    Yep- your last sentence makes a lot of sense. Thank you!
    Originally posted by Rheys99
    but it is wrong,


    Wouldn't it be easier to say that the deposit equates to these percentages and then everything after that is split down the middle assuming payments for mortgages, maintenance etc are split as well?
    maintenance should be done on the % of the share you own which is deposit + half the mortgage.
    • getmore4less
    • By getmore4less 4th Dec 17, 10:04 AM
    • 30,732 Posts
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    getmore4less
    1. Yes he's happy with 9k... the reason the house has increase so much in value is due to refurbishments that I have paid for.

    2. am i right with saying that if we went for 42.7% and 57.3% that would mean that what ever sale price of the house, i would take away 57.3%. The only thing i worry about is that we are hoping to carry about a loft conversion on the house next year and therefore i need a %/clause in the deed which states that any increased equity AFTER 240K should be split 50/50... not sure how i do that!

    Thanks again
    Originally posted by Rheys99
    edit to fix the errors also bold

    with your 44k+9k with the debt 50:50 you start owning the house at 42.7% and 57.3%. (based on the 240k starting value with 187k mortgage)

    if you pay for maintenance and improvements at that % you don't have to change the ownership, as you still own the same share when you come to sell and any improvement in value just works out.

    no need for any intermediate valuations.

    Then it comes down to how you pay for it, if you don't have the cash and have to raise it your shares of the debt might change from 50:50.

    say you still owe 190k thats 95k each.

    your loft conversion costs 50k and you need to borrow all of it.

    the split based on the share is 28,650 & 21,350

    You would then have the mortgage split 123,650:116,350

    keeping the share of the house separate from the share of the debt make things a lot simpler to work out.

    You could even start out owning the house 50:50 by splitting the mortgage 76k:111k.
    Last edited by getmore4less; 04-12-2017 at 4:15 PM.
    • Rheys99
    • By Rheys99 4th Dec 17, 3:45 PM
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    • 1 Thanks
    Rheys99
    with your 44k+9k with the debt 50:50 you start owning the house at 42.7% and 57.3%. (based on the 240k starting value with 196k mortgage)

    if you pay for maintenance and improvements at that % you don't have to change the ownership, as you still own the same share when you come to sell and any improvement in value just works out.

    no need for any intermediate valuations.

    Then it comes down to how you pay for it, if you don't have the cash and have to raise it your shares of the debt might change from 50:50.

    say you still owe 190k thats 90k each.

    your loft conversion costs 50k and you need to borrow all of it.

    the split based on the share is 28,650 & 21,350

    You would then have the mortgage split 118,650:111,350

    keeping the share of the house separate from the share of the debt make things a lot simpler to work out.

    You could even start out owning the house 50:50 by splitting the mortgage 85k:111k.
    Originally posted by getmore4less
    Right.. I think im getting there. Thanks so sticking with me!

    So... we start 42.7% and 57.3%.
    But then, we will be paying for mortgage and maintenance (including the loft conversion) at 50:50.

    So the 42.7 and 57.3 remains. What i worry about, it that these % only take into account the deposits we have put in- it doesn't take into account that due to MY improvements over the last year, the house has increasing 13k in value. I don't want to loose this and my friend to walk away with part of this.

    Does that make sense?
    • getmore4less
    • By getmore4less 4th Dec 17, 4:10 PM
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    getmore4less
    I think there are errors in my last post you quoted will check in a bit.

    Right.. I think im getting there. Thanks so sticking with me!

    So... we start 42.7% and 57.3%.
    But then, we will be paying for mortgage and maintenance (including the loft conversion) at 50:50.

    that will cause you no end of issues trying to work out who owns what best best to make them at the ownership % and just have the mortgage 50:50.

    it keeps everything very simple


    So the 42.7 and 57.3 remains. What i worry about, it that these % only take into account the deposits we have put in- it doesn't take into account that due to MY improvements over the last year, the house has increasing 13k in value. I don't want to loose this and my friend to walk away with part of this.

    That is included in your 44k worth you started out with only 25k if you remember

    Does that make sense?
    Originally posted by Rheys99
    your starting point based on current value 240k not the old value 227k

    you 44k
    them 9k
    mortgage 187k or 93,500 each because you want to pay 50:50

    The 240k is split 137,500:102,500 or 57.3%:42.7%

    If the other person can afford a bit more monthly it might be worth splitting the mortgage to get the ownership 50:50.

    if we guess at 2% over 25years that's about 800pm or 400pm each

    to do it 50:50 you need the mortgage split 76k:111k. or 325:475
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