Divorce - Mortgage deposit question

savgeax

Hello,

Hope someone might be able to help. Myself and wife are going through selling the house before we divorce.

She put in 60k as deposit when we bought it for 300k. We are due to sell for 400k. Thus a 25% profit. She has stated that she is entitled to 25% share of the 60k (15k) and then we split the rest 50/50.
I cannot get my head around why she would receive a 15k interest amount to be honest. Can someone point me in the right direction?

Thank you.

FreddieFrugal

savgeax wrote: »

Hello,

Hope someone might be able to help. Myself and wife are going through selling the house before we divorce.

She put in 60k as deposit when we bought it for 300k. We are due to sell for 400k. Thus a 25% profit. She has stated that she is entitled to 25% share of the 60k (15k) and then we split the rest 50/50.
I cannot get my head around why she would receive a 15k interest amount to be honest. Can someone point me in the right direction?

Thank you.

No way an expert, but if you own the house as Joint Tenants (rather than tenants in common with different shares in the house) then unless you both make the decision to split things in a different way, then you should both be entitled to 50% of the sale of the house.

She can't claim some funny additional percentage based on the deposit if you both agreed by signing contract for the house originally that you owned it 50/50. Otherwise she is trying to say she has a 52/48 share.

I could be wrong, but surely the deposit would only be relevant if you'd decided to own the house with a proportional share based on how much you both put in at the start. Which I'm sure you didn't.

Playing_with_Fire_2

No idea what the laws or traditions are, but this is my point of view:
60k when you bought the house will buy less today (inflation), had she not used the money to put into the house she could have invested it or earned interest on it (opportunity cost), Putting money into a house carries risk and had you not kept up repayments then some or all of the 60k would have been lost.

How much that is worth is a matter of judgement/opinion. If you had not married or lived together then she would enjoy all the increase of the 60k. I think this is why she is saying 25% of the 60k.

An alternative way of looking at it would be to look at how much each of you had contributed to mortgage payments and the deposit combined, and then share the increase in value according to that ratio.

This isn't necessarily how a court would look at it, but it would take time and money to get lawyers to fight it.

Sorry to hear that you are going through a tough time.

kingstreet

Bought for £300k and sold for £400k is a 25% profit?

Really?

It's a profit of £100,000 or 33.3%.

Unless you agreed and set up all the different scenario outcomes when you purchased, you get half each.

David_White

I would imagine the best person to consult is your solicitor.

Good luck

Trying_to_be_good

I think morally:

1. Any mortgage gets paid off.
2. She should get back the £60k she put in before anything else.
3. Assuming you've paid the mortgage and running/improvement costs 50:50, The rest of the equity gets split 50:50, possibly she gets a bit more as the compensation for not getting interest on her £60k.

Legally,, it probably gets split 50:50, along with all other marital assets including pensions (which can be worth more than the equity in the house) - much easier if you can come to an agreement yourselves.

dimbo61

Have you got any kids?
Does she earn more or less than you ?
If she did not put down the £60,000 deposit would you have been able to buy the property which has increased in value by £100,000 ?
Start with the equity left once ALL selling costs are taken into account and the outstanding mortgage has been paid.
Pay your EX the £60,000 she put into the property and 50% of the rest of the equity.
If you earn a higher income and have a better pension she could go after that but you will both spend £ thousands on solicitors