Home issues

[cbrown3301]

I live in Indiana. My girlfriend at the time and I were living together and our lease was up so we decided to look at homes instead of renting. Long story short she had bad credit so we could not use her income to help get a loan for a home. My credit rating was fine so I am the one that purchased the house and I am the only one on the title and mortgage. After a year in the home we decided to get married. Now two years later we are having problems and divorce or seperation talk has come up. She is saying she has talked to an attorney and that even though she is not on the mortgage and we were not married at the time of purchase she will be entitled to half the equity in the home. Is this true?

 

[Ohiogal]

I live in Indiana. My girlfriend at the time and I were living together and our lease was up so we decided to look at homes instead of renting. Long story short she had bad credit so we could not use her income to help get a loan for a home. My credit rating was fine so I am the one that purchased the house and I am the only one on the title and mortgage. After a year in the home we decided to get married. Now two years later we are having problems and divorce or seperation talk has come up. She is saying she has talked to an attorney and that even though she is not on the mortgage and we were not married at the time of purchase she will be entitled to half the equity in the home. Is this true?

She will be entitled to half the equity that accrued during the marriage.

 

[mistoffolees]

She will be entitled to half the equity that accrued during the marriage.

Which is likely to be a very small number.

OP, keep in mind that your attorney is charging you several hundred dollars an hour. This could easily be a case where you'll spend more money fighting over the issue than it's worth. Better to reach an agreement with her on how much equity has accrued than fighting for months over the issue.

 

[cbrown3301]

I purchased the home from a bank because the previous owners just left and it went into forclousure. It was appraised at 156,000 in 2009 and I purchased it from the bank for 119,000 in 2009 and like I asid she is not on the title or mortgage. Every year since then the apprasied value has decreased. We got married in 2010 and my equity is around 40,000. So since the equity of the home has gone down during the time we have been married does that mean there is nothing for her to go after?

 

[nextwife]

I purchased the home from a bank because the previous owners just left and it went into forclousure. It was appraised at 156,000 in 2009 and I purchased it from the bank for 119,000 in 2009 and like I asid she is not on the title or mortgage. Every year since then the apprasied value has decreased. We got married in 2010 and my equity is around 40,000. So since the equity of the home has gone down during the time we have been married does that mean there is nothing for her to go after?

If it is now worth less than when you married, there is no marital equity.

 

[tuffbrk]

Nexxie - isn't the equity the difference between what it would sell for as compared to what is owed? I'm getting confused by this OP as they are stating that they have $40k in equity...

 

[nextwife]

Nexxie - isn't the equity the difference between what it would sell for as compared to what is owed? I'm getting confused by this OP as they are stating that they have $40k in equity...

He said his total equity now is 40k.

The marital equity is the difference between what equity he had coming into the marriage and the current equity. He never told us how much he put down, or how much he may have paid down the mortgage by the date of marriage (yes, sometimes people do pay down thousands even in the first few years), only the values, so we don't know what his earlier equity was. Maybe I missed it, but I see no info that says what EQUITY he had coming into the marriage. STBX would only be entitled to share any equity that occurred during the marriage.

 

[tuffbrk]

Okay for those of us with gray hairs...I am asking for a bit more clarity to better understand. He bought it in 09 for 119k - we don't know what he put down or mortgaged. Then he married her in '10 and so the equity is the difference between the value in '10 and what is owed today? Which if he only made mortgage payments may only be a couple hundred dollars? Am I on the right track?

My head cold is clogging not just my ears but my brain today as well! I thank you in advance for your patience!

 

[nextwife]

Okay for those of us with gray hairs...I am asking for a bit more clarity to better understand. He bought it in 09 for 119k - we don't know what he put down or mortgaged. Then he married her in '10 and so the equity is the difference between the value in '10 and what is owed today? Which if he only made mortgage payments may only be a couple hundred dollars? Am I on the right track?

My head cold is clogging not just my ears but my brain today as well! I thank you in advance for your patience!

I, too, have gray hairs. I credit my kiddo for giving me those!


Not exactly. The equity now is the DIFFERENCE between what it's worth and what is owed on it. The equity at marriage would have been the difference between what he owed on the mortgage at the time he married her and what it was worth at the time he married her.

The difference between the equity at marriage and the equity now is what she'd be entitled to share. That is the Marital Equity.

 

[LdiJ]

Okay for those of us with gray hairs...I am asking for a bit more clarity to better understand. He bought it in 09 for 119k - we don't know what he put down or mortgaged. Then he married her in '10 and so the equity is the difference between the value in '10 and what is owed today? Which if he only made mortgage payments may only be a couple hundred dollars? Am I on the right track?

My head cold is clogging not just my ears but my brain today as well! I thank you in advance for your patience!

He is saying that the house originally appraised at 156k and he bought it from the bank at 119k, so he believes that he had equity coming out of the gate. That is why he is saying that he has 40k in total equity.

OP, you need to figure out the difference between the total equity you had on the date you got married, and the total equity now. If that is a negative number, you don't owe her anything. If that is a positive number then you owe her 1/2 of that.

 

[cbrown3301]

Maybe this will help. I put 5,000 down of my own money up front to bring the price to 119,000. The house appraised at 156,000 in 09 when I bought it. we got married a year later,10, and the tax appraised value has gone down to 150,000 since I bought it in 09. So if I am looking at this right there is a neg equity since we have gotten married. My equity went from 37,000 in 09 to 36,000 currently.....yes or no?

 

[ecmst12]

You haven't mentioned how much your loan was for, how much you owed in 09, or how much you owe now.

 

[nextwife]

Maybe this will help. I put 5,000 down of my own money up front to bring the price to 119,000. The house appraised at 156,000 in 09 when I bought it. we got married a year later,10, and the tax appraised value has gone down to 150,000 since I bought it in 09. So if I am looking at this right there is a neg equity since we have gotten married. My equity went from 37,000 in 09 to 36,000 currently.....yes or no?

You are confusing terms, I believe. The PRICE is the contract purchase amount. The mortgage is an entirely different number.

So, please tell us what you owed on your mortgage when you married, and how much market value was at that time. Now tell us what the market value of the house is today, and what you owe on the mortgage.

What equity you had at purchase is not relevent.

 

[mistoffolees]

Maybe this will help. I put 5,000 down of my own money up front to bring the price to 119,000. The house appraised at 156,000 in 09 when I bought it. we got married a year later,10, and the tax appraised value has gone down to 150,000 since I bought it in 09. So if I am looking at this right there is a neg equity since we have gotten married. My equity went from 37,000 in 09 to 36,000 currently.....yes or no?

You're confusing a lot of issues. Let's make it as simple as I can.

First. Equity is the difference between the value of the home and any debt on the home.

Initial equity is the equity at the time you got married.

Final equity is the equity at the time you got divorced.

If Initial equity > final equity, then marital equity is negative and you don't owe her anything.

If Final equity > initial equity, then the difference is marital equity and you owe her half.

Now, the only problem is how you define 'value of the home' both at the time of your marriage and at the time of your divorce. On paper, you might want to use the appraised value, but appraisals are often way off. More importantly, you should NOT use the appraised value for 'initial value' and something different for 'final value'. You should determine the value by the same method both at the beginning and at the end of the marriage. Otherwise, the answer will be skewed.

You really have three options:
1. Get a new appraisal from the same company that did the first appraisal. They may or may not be 'right' but chances are that they'll be wrong by the same amount in both appraisals.

2. Talk with a well-respected real estate expert who can evaluate the specific home and estimate how much the value has changed during your marriage based on local conditions.

3. Look your home up on Zillow.com which gives a 'fair market value' and shows how it has changed over time. Note, Zillow is notoriously inaccurate so you would be hoping that their errors at the beginning and at the end of the marriage are about the same.

If the two of you can't agree on a figure, plan on an expensive court battle.

 

[tuffbrk]

I, too, have gray hairs. I credit my kiddo for giving me those!


Not exactly. The equity now is the DIFFERENCE between what it's worth and what is owed on it. The equity at marriage would have been the difference between what he owed on the mortgage at the time he married her and what it was worth at the time he married her.

The difference between the equity at marriage and the equity now is what she'd be entitled to share. That is the Marital Equity.

I was missing that it was equity then to equity now. However, now I get it! I get it! I get it! (jumping up and down). Thank you!