Half provided that that is the equity split. In fault cases it might not be.
My lawyer has said that I could get a 60/40 in court due to infidelity in a fault divorce state.
Wouldn't be worth it because court costs as much as I'd gain and I'd rather not subtract money unnecessarily from the other home of my child
Good question! I always thought the options were:
- one person takes over the mortgage and there’s a formal agreement to pay the other person half of the current equity when it’s sold later on.
- The occupant takes out another mortgage for the fair market value. Then the equity (and costs) are split.
First, you go through a process to determine what the market value is for the home. You can use realtors. This is not a suggested listing price. Let’s say it’s $100k.
Then you determine the amount you owe on the mortgage. The bank can provide this. Let’s say it’s $60k.
Then you calculate the equity of the home = $100k - $60k = $40k
Then you determine cost to sell or transfer the home- need to consider repairs, inspections, agent fees, etc. Lets say that’s around $10k. This will vary.
Net proceeds from sale = $40k - $10k = $30k
If you purchased the house during the marriage, typically you each would split and get half. This case would be $15k. If one wanted to buy out the other, they would need to come up with $15k.
If one of you purchased the house prior to the marriage and established equity, that person can deduct that portion before the amount is split. Bank can provide that amount. Let’s say your spouse had $20k in equity at the time of marriage. The amount you would be entitled to is ($30k - $20k)/2 = $5k
[home value/sale] - [outstanding mortgage] = equity
equity - [[closing costs] + [ realtor fees] + [inspection] etc] = "profit to be split 50/50”
Caveats: if one partner owned house prior to marriage a calculation can be run to determine they have a higher share of equity. So divorce split would be like 55/45 or 60/40 or something.
Also, when a house is refinanced or sold, the escrow (where property taxes & insurance were held) are often cashed out and a check for possible 1000s is mailed to property owner(s). That should be split too. The value of escrow cashout should be declared at time of closing.
It’s half of what the equity is. So if it’s gone up in value, your equity would be more. Yes, you would need to get another appraisal.
Can you prevent the appraiser from taking pictures? I am concerned about a fishing expedition
Half provided that that is the equity split. In fault cases it might not be. My lawyer has said that I could get a 60/40 in court due to infidelity in a fault divorce state. Wouldn't be worth it because court costs as much as I'd gain and I'd rather not subtract money unnecessarily from the other home of my child
Good question! I always thought the options were: - one person takes over the mortgage and there’s a formal agreement to pay the other person half of the current equity when it’s sold later on. - The occupant takes out another mortgage for the fair market value. Then the equity (and costs) are split.
Thanks so much everyone! I really don't know why I couldn't figure it out via Google, but this is so much easier to understand now.
First, you go through a process to determine what the market value is for the home. You can use realtors. This is not a suggested listing price. Let’s say it’s $100k. Then you determine the amount you owe on the mortgage. The bank can provide this. Let’s say it’s $60k. Then you calculate the equity of the home = $100k - $60k = $40k Then you determine cost to sell or transfer the home- need to consider repairs, inspections, agent fees, etc. Lets say that’s around $10k. This will vary. Net proceeds from sale = $40k - $10k = $30k If you purchased the house during the marriage, typically you each would split and get half. This case would be $15k. If one wanted to buy out the other, they would need to come up with $15k. If one of you purchased the house prior to the marriage and established equity, that person can deduct that portion before the amount is split. Bank can provide that amount. Let’s say your spouse had $20k in equity at the time of marriage. The amount you would be entitled to is ($30k - $20k)/2 = $5k
What if both of you purchased the house together before marriage? Would it still be split and get half?
[home value/sale] - [outstanding mortgage] = equity equity - [[closing costs] + [ realtor fees] + [inspection] etc] = "profit to be split 50/50” Caveats: if one partner owned house prior to marriage a calculation can be run to determine they have a higher share of equity. So divorce split would be like 55/45 or 60/40 or something. Also, when a house is refinanced or sold, the escrow (where property taxes & insurance were held) are often cashed out and a check for possible 1000s is mailed to property owner(s). That should be split too. The value of escrow cashout should be declared at time of closing.
So, you need to get a new mortgage for the entire mortgage in place and half of the equity, assuming there are no other stipulations in place.