Buying out Ex partner share of the property

smithj82

getmore4less wrote: »

Ok £31K uplift

As I said if you want a proper analysis equitable version it needs a lot more detail.

The get you money back is just the same as an interest free loan to the other person.

lets look at the equitable way.

starting point

£88500 £28k deposit £60500 mortgage paid 50-50

ownership is £58250:£30250 at the start.

Every time you make an overpayment the equitable ownership changes unless you change the debt.

gets very messy if you don't rebalance by adjust the payments on the mortgage

another option is rebalance based on a linear increase in value.

I can explain further

The key if you what deal did you go into the joint purchase if you had one.

yeah this is the sort of detail we want to go into. We both just want what back what we paid in. by the sounds of it I will need our statements about our mortgage payments/overpayments made and take this to a financial advisor so we can work out a split for this.

Thrugelmir

smithj82 wrote: »

yeah this is the sort of detail we want to go into. We both just want what back what we paid in. by the sounds of it I will need our statements about our mortgage payments/overpayments made and take this to a financial advisor so we can work out a split for this.

Then there's the shopping to consider, who paid the utility bills etc.

Far easier just to agree upon a figure.

ViolaLass

Post 2 gave you an easy (and fair) answer.

smithj82

Thrugelmir wrote: »

Then there's the shopping to consider, who paid the utility bills etc.

Far easier just to agree upon a figure.

we both just put the same amount of money into a joint account each month that covered the mortgage payments, bills, food etc so thats all the same.

We dont really want just the fair or easy figure. just the correct one. Neither of us want to be getting ripped off and entitled to what we have put in plus any profit made by equity.

getmore4less

smithj82 wrote: »

yeah this is the sort of detail we want to go into. We both just want what back what we paid in. by the sounds of it I will need our statements about our mortgage payments/overpayments made and take this to a financial advisor so we can work out a split for this.

Lets do the extremes

overpayment all at end.

£88500 £28k deposit £60500 mortgage paid 50-50

£58250:£30250 at the start.

sale £120k split is £78983 : £41017

mortgage is still £35k (£20k + the £15k overpayments) £17500 each

So other half is due (41017 - 17500) £23517.

if you paid the £15k up front.

£88500 £43k deposit £45500 mortgage paid 50-50

£65750:£22750 at the start.

sell 120k payoff £10k each she is owed £20847

The equitable answer is between £20847 and £23517.

The get your money back was £28500.

This assumes you have taken account of the costs of buying/selling etc.

smithj82

getmore4less wrote: »

Lets do the extremes

overpayment all at end.

£88500 £28k deposit £60500 mortgage paid 50-50

£58250:£30250 at the start.

sale £120k split is £78983 : £41017

mortgage is still £35k (£20k + the £15k overpayments) £17500 each

So other half is due (41017 - 17500) £23517.

if you paid the £15k up front.

£88500 £43k deposit £45500 mortgage paid 50-50

£65750:£22750 at the start.

sell 120k payoff £10k each she is owed £20847

The equitable answer is between £20847 and £23517.

The get your money back was £28500.

This assumes you have taken account of the costs of buying/selling etc.

wow. Thanks for this. Fantastic.much appreciated

getmore4less

smithj82 wrote: »

wow. Thanks for this. Fantastic.much appreciated

work through and check the numbers important you both understand how it is done.

smithj82

getmore4less wrote: »

work through and check the numbers important you both understand how it is done.

I've sent you a private message getmore4less

getmore4less

To do equitable version.

At the start money/debt buys equity.

The equity and servicing of the debt are separate once the deal is done.

Start with the total cost of the house, purchase and costs.

Split these based on cash inputs and planned servicing of debts.

£88500 £28k deposit £60500 mortgage paid 50-50

£28k + £60500/2 = £58250 65.82%
£00k + £60500/2 = £30250 34.18%

That's the split of ownership
(the mortgage just works until you start overpaying in unequal amounts)

sale £120k split is £78984 : £41016 based on the above %(rounding so the £ have changed.

you then pay off the share of the mortgage from your share of the equity

mortgage is still £35k (£20k + the £15k overpayments) £17500 each

that's where the £23516 figure comes from

Do the same as if you had done all your overpayments up front get the other figure.

The real answer is in between somewhere.

if you want to go more accurate it will be easier to treat the debt/overpayments situation to work out how much you each owe rather than 50:50
.
To go down the changes in equity route is a lot more complicated and guesswork.

One way to get the mortgage is separate in your head is pretend you borrowed the money off your mums and you both paid cash for the house.

There is another complication if you did any work on the house that should have been split at the ownership %. if done 50:50 you could factor that in as well.


What did you agree when you started out on this purchase?

ViolaLass

So 'more calculations' equals 'correct' in your eyes? Just know that it's still subjective, however many calculations were involved.