Selling and equity split after a break u

exiled_red

itchyfeet123 wrote: »

That disadvantages the OP by disregarding that s/he has paid more than 37.5% when accounting for mortgage payments etc.

The simplest way would be to tally up the total amounts paid and divide the proceeds (i.e. money from sale minus remaining mortgage, agent fees, etc) from the sale in those proportions. Eg paid to date deposits 50k + 30k and mortgage, say, 10k +10k. So ex has paid 60k and OP 40k, and they split proceeds 60% to 40%. The more that has been paid towards the mortgage, the more even the split becomes, to the point that if you had finished paying the mortgage (and ignoring interest for simplicity) ex would have paid 50k +120k and OP 30k +120k, making the proportions 170/320=53.1% for ex and 150/320=46.9% for OP.

It's all a complex situation, the OP's ex could say that because of their higher deposit their 50% share of the mortgage was paying off a greater share of principle loan and the OP's would be paying more interest to gain a 50% share (if you were to consider the hypothetical situation where they each had loans to buy a 50% share of the property the one with the higher share of the deposit would be making lower monthly repayments, therefore by paying 50% of the joint repayments they are maintaining a higher share of the property). There are so many ways to argue it as there was no agreement at the outset.

This could get messy and I guess you could both argue it however you wanted. I assume you will have to come to an agreement between the two of you and I guess it comes down to what both your priorities are, whether you each want to maximise your financial return or you want the other person out of your life and make a clean break. If you want 50% then it may drag on for a while, if I were you I would start with 50:50 as a negotiating position and see what your ex comes back with, you seem reasonable and willing to negotiate, but don't let the ex take advantage of this.

parkrunner

Mort123 wrote: »

Hello,


I'm hoping for some advice.


My boyfriend and I bought a property together with different deposit amounts and own it as tenants in common.


He put in 50k deposit and I put in 30k. We decided to split everything else (mortgage payments, fees, stamp duty and a new bathroom) 50:50.


Naively, in the throes of love we had an unclear arrangement about how we would split the sale of the house.


We have split up and I feel completely trapped in the house and unclear what my financial options are and whether I can afford to buy on my own.


Can anyone help with a suggestion of what might be reasonable based on the facts?


Thank you

What does your ex say?

getmore4less

itchyfeet123 wrote: »

That disadvantages the OP by disregarding that s/he has paid more than 37.5% when accounting for mortgage payments etc.

The simplest way would be to tally up the total amounts paid and divide the proceeds (i.e. money from sale minus remaining mortgage, agent fees, etc) from the sale in those proportions. Eg paid to date deposits 50k + 30k and mortgage, say, 10k +10k. So ex has paid 60k and OP 40k, and they split proceeds 60% to 40%. The more that has been paid towards the mortgage, the more even the split becomes, to the point that if you had finished paying the mortgage (and ignoring interest for simplicity) ex would have paid 50k +120k and OP 30k +120k, making the proportions 170/320=53.1% for ex and 150/320=46.9% for OP.

Using the amount paid on the mortgage interest is a very bad way to work out equity.

itchyfeet123

getmore4less wrote: »

Using the amount paid on the mortgage interest is a very bad way to work out equity.

Good thing my approach doesn't do that then.

Mort123

That they want the equivalent of their deposit amount, so 60%...

silvercar

Mort123 wrote: »

That they want the equivalent of their deposit amount, so 60%...

If you have been on a repayment mortgage you have been repaying some capital off the mortgage 50/ 50, so I'd kick that proposal out for starters.

Mort123

What would you suggest as an alternative? I'm finding it all a little tricky to get my head round.

Pixie5740

I assume you own the property as tenants in common with a 50/50 split and there is no Deed of Trust. Therefore you could legitimately claim half the equity. However, I think either way suggested in post 5 would be fairer.

danslenoir

Mort123 wrote: »

I don't think a 50:50 split of increased value will work as he always pointed out he should benefit from putting more in upfront.

Thank you

Would ex be offering to bear more responsibility for your outstanding debt if you were in negative equity on the basis that he put more deposit in?

getmore4less

Mort123 wrote: »

What would you suggest as an alternative? I'm finding it all a little tricky to get my head round.

I have explained the way to do proper equity shares.

If the oh disagrees then you have problems.