Equity during Separation

[amd64a]

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

I have a question regarding the equity paid into a house during a separation. Wife stopped paying the mortgage almost 2 years ago. I paid the mortgage in full for 23 months so far, and have reduced the amount owed to the bank by $8145.

I have gotten several very differing legal opinions on whether I am entitled a credit for the equity at settlement. There is absolutely no consensus on either side as to the logic and law behind it. Let’s say my house is appraised at $258,145, and the amount NOW owed to the bank is 240,000. That’s a difference of $18,145 theoretically to split. However, the amount owed at the time of separation was $248,145. Now if that figure were to be used, the difference would only be $10,000.

Some have said that since “you would have to pay rent somewhere anyway”, anything I have paid to reduce the mortgage principle to the bank is never considered. However, a few others have said that the interest, property taxes, and personal mortgage insurance per month are equivalent to a monthly rent payment, and that I am entitled to the full amount I have reduced the principle of the mortgage since the separation. One other has said whatever I paid to the bank regardless I am entitled to at settlement. I have had one PA lawyer tell me that his client was given NO consideration for equity he paid into the home.

I am not seeing how I would not receive credit for money that I used to reduce the amount owed to the bank. According to some, I basically have been sending her a check for $175 every month by paying the mortgage, (which each month reduces the principle by $350) since she would get half the TOTAL equity in the home.

Can anyone point me to Pennsylvania case law that gives any direction on this?

 

[Ohiogal]

Google "judicial discretion Pennsylvania mortgage equity divorce"

 

[Bali Hai]

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

I have a question regarding the equity paid into a house during a separation. Wife stopped paying the mortgage almost 2 years ago. I paid the mortgage in full for 23 months so far, and have reduced the amount owed to the bank by $8145.

I have gotten several very differing legal opinions on whether I am entitled a credit for the equity at settlement. There is absolutely no consensus on either side as to the logic and law behind it. Let’s say my house is appraised at $258,145, and the amount NOW owed to the bank is 240,000. That’s a difference of $18,145 theoretically to split. However, the amount owed at the time of separation was $248,145. Now if that figure were to be used, the difference would only be $10,000.

Some have said that since “you would have to pay rent somewhere anyway”, anything I have paid to reduce the mortgage principle to the bank is never considered. However, a few others have said that the interest, property taxes, and personal mortgage insurance per month are equivalent to a monthly rent payment, and that I am entitled to the full amount I have reduced the principle of the mortgage since the separation. One other has said whatever I paid to the bank regardless I am entitled to at settlement. I have had one PA lawyer tell me that his client was given NO consideration for equity he paid into the home.

I am not seeing how I would not receive credit for money that I used to reduce the amount owed to the bank. According to some, I basically have been sending her a check for $175 every month by paying the mortgage, (which each month reduces the principle by $350) since she would get half the TOTAL equity in the home.

Can anyone point me to Pennsylvania case law that gives any direction on this?

Is this issue addressed in your separation agreement? If not, or, if you don't have a separation agreement at all, you'll likely find yourself dividing the TOTAL equity in the home.

 

[LdiJ]

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

I have a question regarding the equity paid into a house during a separation. Wife stopped paying the mortgage almost 2 years ago. I paid the mortgage in full for 23 months so far, and have reduced the amount owed to the bank by $8145.

I have gotten several very differing legal opinions on whether I am entitled a credit for the equity at settlement. There is absolutely no consensus on either side as to the logic and law behind it. Let’s say my house is appraised at $258,145, and the amount NOW owed to the bank is 240,000. That’s a difference of $18,145 theoretically to split. However, the amount owed at the time of separation was $248,145. Now if that figure were to be used, the difference would only be $10,000.

Some have said that since “you would have to pay rent somewhere anyway”, anything I have paid to reduce the mortgage principle to the bank is never considered. However, a few others have said that the interest, property taxes, and personal mortgage insurance per month are equivalent to a monthly rent payment, and that I am entitled to the full amount I have reduced the principle of the mortgage since the separation. One other has said whatever I paid to the bank regardless I am entitled to at settlement. I have had one PA lawyer tell me that his client was given NO consideration for equity he paid into the home.

I am not seeing how I would not receive credit for money that I used to reduce the amount owed to the bank. According to some, I basically have been sending her a check for $175 every month by paying the mortgage, (which each month reduces the principle by $350) since she would get half the TOTAL equity in the home.

Can anyone point me to Pennsylvania case law that gives any direction on this?

To be honest, I would see you as potentially not having any equity in the home. The equity that you do have is likely less than what selling costs would be, and that's only if you could get as much as you paid for the home. I would get it appraised now before you start discussing the division of equity.

 

[Bali Hai]

To be honest, I would see you as potentially not having any equity in the home. The equity that you do have is likely less than what selling costs would be, and that's only if you could get as much as you paid for the home. I would get it appraised now before you start discussing the division of equity.

I agree with you. It appears OP is looking for a "credit" for making all those payments and lowering the amount owed to the bank since his separation and this would be over and above equity at the time of separation. Unless he has an agreement to that effect, he's out of luck.