pre-marital assets

[kbrugnani]

What is the name of your state (only U.S. law)? New Hampshire

Well the war is on but an easy war so to speak. My wife coughed up 10k out her 401k so we could buy our house, now we have mutually agreed on everything except she expects me to pay her back the 10k. Now in my eyes, I think I should only be responsible for half that because that would be like me taking 10k out of pocket and paying for what we bought together. Therefore, legally am I obligated to pay the whole amount or just a portion? So far I have verbally agreed to pay 6500 and others tell me that I shouldn't be giving her that much. So I am not exactly sure who is correct.

Mind you, I want it all to be fair so she gets what she needs to move out of the house once we sell it since we cannot make a profit on the house with an FHA loan.

 

[LdiJ]

What is the name of your state (only U.S. law)? New Hampshire

Well the war is on but an easy war so to speak. My wife coughed up 10k out her 401k so we could buy our house, now we have mutually agreed on everything except she expects me to pay her back the 10k. Now in my eyes, I think I should only be responsible for half that because that would be like me taking 10k out of pocket and paying for what we bought together. Therefore, legally am I obligated to pay the whole amount or just a portion? So far I have verbally agreed to pay 6500 and others tell me that I shouldn't be giving her that much. So I am not exactly sure who is correct.

Mind you, I want it all to be fair so she gets what she needs to move out of the house once we sell it since we cannot make a profit on the house with an FHA loan.

If you take the 10k off the top, its exactly the same as you giving her an extra 5k.

if you have 20k in equity and split it in half, then that's 10k each. If you then give her 5k, you end up with 5k.

If you take 10k off the top, that leaves 10k. If you split the remaining 10k 50/50, that still leaves you with 5k.

That is however, assuming that she is entitled to the 10k back at all, rather than just the two of you splitting the equity. Depending on the circumstances, a judge probably wouldn't make you reimburse her the down payment, but would more likely just have you split the equity.

What do you mean that you can't make a profit on the house with an FHA loan?

 

[kbrugnani]

If you take the 10k off the top, its exactly the same as you giving her an extra 5k.

if you have 20k in equity and split it in half, then that's 10k each. If you then give her 5k, you end up with 5k.

If you take 10k off the top, that leaves 10k. If you split the remaining 10k 50/50, that still leaves you with 5k.

That is however, assuming that she is entitled to the 10k back at all, rather than just the two of you splitting the equity. Depending on the circumstances, a judge probably wouldn't make you reimburse her the down payment, but would more likely just have you split the equity.

What do you mean that you can't make a profit on the house with an FHA loan?

According to the contract we signed, we cannot sell it and make a profit. Unless that is pertaining to as a flip investment. And in the contract it states we cannot sell the house for one year that is in our control (other words, control of the situation, Excluded: disabilities, illness, death are some of the uncontrollable reasons) mind you we just purchased the house back in February.

 

[LdiJ]

According to the contract we signed, we cannot sell it and make a profit. Unless that is pertaining to as a flip investment. And in the contract it states we cannot sell the house for one year that is in our control (other words, control of the situation, Excluded: disabilities, illness, death are some of the uncontrollable reasons) mind you we just purchased the house back in February.

You are misinterpreting the contract that you signed. The FHA cannot and does not prohibit someone from making a profit on the sale of their home.

However, if you just bought it in February, then there is no way in heck that you can make a profit....in fact, if you sell now (and divorce is probably on that list of reasons which makes it ok to sell in less than a year) you would likely sustain a loss.

 

[kbrugnani]

You are misinterpreting the contract that you signed. The FHA cannot and does not prohibit someone from making a profit on the sale of their home.

However, if you just bought it in February, then there is no way in heck that you can make a profit....in fact, if you sell now (and divorce is probably on that list of reasons which makes it ok to sell in less than a year) you would likely sustain a loss.

Thanks for the insight because I was getting in an argument with my wife about it. Now I know it is because she does not want to give up the house until then. That is fine by me and I do not want to sustain a loss because of the consequences that would follow.

We do have about 8K in equity right now because we bought the house for less than what the bank appraised it at which is another good thing.

 

[MFinancier]

If the 10K came out of her nonmarital 401K account...and you want to be fair...give her a credit of 10K before you split any equity. If 8K in equity is all you have...give it to her and consider yourself lucky you didn't "cough" up the 10K yourself...and then only get 8K back!!! If you think splitting the 8k in equity is fair and only giving her 4K out of her 10k in nonmarital funds...I'd hate to see what you think is unfair! Actually the proper way to do it would be to give her a credit for the non marital 10K and split the 2K passive marital loss (if 8K is all your equity)....which would be 9k back to her....and 1K out of your pocket!!!! That's fair!!!!!