Propert division question

[2forMe]

I am looking for thoughts on division of property based on the following scenario.

* Property purchased 7 yrs ago for $427k with a $96k downpayment made by person A.
* Mortgage was obtained at $331k, 3.49% bi weekly payments. So currently 7yrs later mortgage is approximately $265k.
* After realtor fees etc the house would be worth approx. $510k

Assuming equal contributions to mortgage payments( by person A and person B)...and $96k down payment by Person A...how should the approx. $245k equity be divided?

Not marital or any type of property so that is not needed to take into account.

 

[cinnaminny]

I would think the easiest would be to give the down payment back to person A and then split the rest up equally.

 

[2forMe]

I would think the easiest would be to give the down payment back to person A and then split the rest up equally.

That is what I thought...but does the downpayment increase the percentage of equity? Because the $96k downpayment could have been invested elsewhere and gained interest...so worth more than $96k....

 

[crispychicky]

When A put down the downpayment, A "bought" 22.5% of the property ($96k/$427k). Today, 22.5% of the property is worth $114,750 ($510k*0.225). A should get $114,750 + half the remainder once the mortgage is fully paid off.

If the value of the property had decreased in the 7 year span, A should still get 22.5% of today's value, not the full $96k back. i.e. if the property is now worth half, A should only get $48k back from his $96k investment.

 

[amcnj]

When A put down the downpayment, A "bought" 22.5% of the property ($96k/$427k). Today, 22.5% of the property is worth $114,750 ($510k*0.225). A should get $114,750 + half the remainder once the mortgage is fully paid off.

If the value of the property had decreased in the 7 year span, A should still get 22.5% of today's value, not the full $96k back. i.e. if the property is now worth half, A should only get $48k back from his $96k investment.

Agree with the above. “A” invested in the house. I was involved in something similar decades ago and this was the type of thinking we used then.