Tenants in Common share calculator

getmore4less

Rheys99 wrote: »

I get it! Finally!
But....

So this is all well and good if the house value stays at 240k.

But.. what if in 5 years the house is worth 500k (unlikely but etrewm values help me)
A 57%/42% split wouldn't be fair as this increase will have happened when my friend is an owner of the house. Therefore is there any way of writing in that?

Thanks so so much

in what way is it not fair they owned part of the house they are due a share of the increase,

The point is that this is the fair way to do it.

the £500k would be split 57.3%:42.7% or £286,500:£213,500

you then take off the share of the mortgage in my example of £187k @ 2% over 25y in 5y you owe £156k or £78k each

you then net £208,500:£135,500

getmore4less

remember.

£227,000 (£34,000 deposit- £25,000 me and £9,000 him).

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

your ex owned (£9k+£193/2)/£227= 46.5% (you owned 53.5%)
was due
(£240*0.465)-(£187/2)=£18,100

you are very lucky they only want £9k and that has increased your new share up to 57.3%

ThePants999

Just to throw another thought out there - you could have the house, mortgage, maintenance and improvements all on a 50:50 split and separately agree that your friend owes you £17,500 Keeps things simple...

Rheys99

They are certainly due a share of the increase ONCE they move in (which will be when the house is at 240k). But Since buying the house I have spent a lot of money fitting a new bathroom/ fire/doors across the house that has been the reason that it has increased from 227k to 240k. I feel it is fair that I keep that money. All have that have been taken into consideration at 57%/42%.

But any increase in value UPWARDS of 240k should be split 50/50 as they will be due a share...

My mind is exploding!

Rheys99

getmore4less wrote: »

remember.



your ex owned (£9k+£193/2)/£227= 46.5% (you owned 53.5%)
was due
(£240*0.465)-(£187/2)=£18,100

you are very lucky they only want £9k and that has increased your new share up to 57.3%

He owes me £10k for his car that I helped him buy, so not toooo lucky

getmore4less

Rheys99 wrote: »

They are certainly due a share of the increase ONCE they move in (which will be when the house is at 240k). But Since buying the house I have spent a lot of money fitting a new bathroom/ fire/doors across the house that has been the reason that it has increased from 227k to 240k. I feel it is fair that I keep that money. All have that have been taken into consideration at 57%/42%.

But any increase in value UPWARDS of 240k should be split 50/50 as they will be due a share...

My mind is exploding!

It's all taken into consideration you are starting with your friend at £240k

you seem to forget they are buying £102,500 off you with a £9k deposit and a 1/2 share of the mortgage,

you don't own all the £240k.

getmore4less

Rheys99 wrote: »

He owes me £10k for his car that I helped him buy, so not toooo lucky

About even then.
put it behind you and get this sharing right.

getmore4less

Can you describe how you think this loft conversions is going to be funded and how you think it effects the ownership?

I am starting to get quite concerned for your friend as even though they are buying nearly 1/2 the house from you you think they are only due 1/2 the increase in value.

Rheys99

I am getting so confused. I really am trying my best to get my head around this but it seems I'm coming across as selfish and greedy- I'm not, I'm just simply trying to process it all. I want the sharing to be fair, obviously, but I'm struggling to make the numbers work in my head at the moment- sorry

Back to basics.... Just let's say....
Day 1: my friend comes onto the mortgage of a 240k house with a mortgage of 187k (paying 9k and me paying 44k deposits) (am I right in saying this is essentially what it is?)

Day 15: we've decided to sell. We get 240k for the house. We pay the lender back their 187k and we are left with 53k. Using the 57%/43% formula, I walk away with 30k and my friend 23k.

If the percentages are right, surely I should be walking away with 44k and my friend, 9k

?

ThePants999

Rheys99 wrote: »

Day 15: we've decided to sell. We get 240k for the house. We pay the lender back their 187k and we are left with 53k. Using the 57%/43% formula, I walk away with 30k and my friend 23k.

No, it's like this. You get 57% of 240K, and pay back half the mortgage, leaving £44K. Your friend gets 43% of 240K, and pays back half the mortgage, leaving £9K.

Remember, the mortgage is a financial product, it's separate to the home ownership. "Equity" is a useful concept, but it's just a concept. You don't actually own only £53K of the house, you own the whole house - but you also owe £187K to a bank, secured on the house. So you take your share of the house (57%), and then you pay off your share of the loan (50%).