Selling Tenants in Common - Confused!

BrisbaneGirl

Hi, hoping to get some advice here.
A few years ago I bought a house with a friend. Agreement says, house owned 50/50 but the mortgage is split 33%/66%
I put in a 50k deposit and the friend put in 0.
The total mortgage was 150k - so 25k was mine and 75k my friends.

Now we're looking to sell but I'm confused as to how to calculate each share.

A) Sell at 220k
Take my equity first
Split the remainder
Pay mortgage off according to percentage split

Or

Sell at 220k
Split proceeds 50/50 each
Pay mortgage off according to percentage split

The contract doesn't stipulate me getting my deposit back first before splitting the proceeds of the sale but surely that is the correct calculation??

Any advice much appreciated

Thanks

amnblog

It depends what the intention was.

If you have been paying the mortgage proportionately based on one having deposit and one not then it is.

Sales, less costs, less mortgage = equity.

Take off £50,000

One partner gets the £50,000 and half the balance.

The other gets what is left.

Annisele

BrisbaneGirl wrote: »

Hi, hoping to get some advice here.
A few years ago I bought a house with a friend. Agreement says, house owned 50/50 but the mortgage is split 33%/66%
I put in a 50k deposit and the friend put in 0.
The total mortgage was 150k - so 25k was mine and 75k my friends.

I think some of your figures might have gone a bit iffy. £25k plus £75k is £100k, not £150k - and would also be a 25%/75% split.

In any case, so far as the lender is concerned you're both responsible for the whole of the mortgage - in the lender's eyes, there's no "my half" (or "my one third"), there's just a whole mortgage. So, when you sell, the lender gets paid first, and then you and your friend split the equity between you after that's happened.

The "correct" calculation is whatever you and your friend agreed to when you bought the place. When you say "agreement says house owned 50/50", what agreement is that? A Deed of Trust?

But if you and your friend now agree something different, that's fine too (so long as the lender gets paid).

Can you give the figures again, and explain which of you has paid more towards the mortgage?

POPPYOSCAR

[QUOTE=Annisele;65439788]I think some of your figures might have gone a bit iffy. £25k plus £75k is £100k, not £150k - and would also be a 25%/75% split.

In any case, so far as the lender is concerned you're both responsible for the whole of the mortgage - in the lender's eyes, there's no "my half" (or "my one third"), there's just a whole mortgage. So, when you sell, the lender gets paid first, and then you and your friend split the equity between you after that's happened.

The "correct" calculation is whatever you and your friend agreed to when you bought the place. When you say "agreement says house owned 50/50", what agreement is that? A Deed of Trust?

But if you and your friend now agree something different, that's fine too (so long as the lender gets paid).

Can you give the figures again, and explain which of you has paid more towards the mortgage?[/QUOTE]

The OP put down a £50,000 deposit so the mortgage is £100,000 hence £150,000?

ethank

Legally you both own 50% of the house.

Why did she have 66% of the mortgage payments - was this because of your deposit?

I would have expected to get out my equity first? She should be entitled to a share of the uplift in value otherwise I'd be giving her free money. However, why does your contract not reflect that?