How to split assets

[tiredofthisshit21]

Not sure what topic this belongs in. We need to agree a split of assets for what was originally my house. Bought for 220k in 2011, with 150k deposit. Married DH In 2018 and extended house at the same time. He paid off 13k of the mortgage and has been paying half of mortgage since we married. House was probably worth close to 300k before extending, and worth about 475k now. We want to downsize and for me to take out my share to help fund my retirement, then buy new place 50/50. How would you split the % ownership? I thought about just taking out my deposit but maybe that wouldn't be fair.

No one can answer that in isolation. Ages, earning capacity, kids, pensions, health, other assets etc all need accounted for too. To split assets need it all added up and all factors considered. You’d be better with mediation or legal advice. 50-50 just the starting point.

No it’s a tricky bit of maths. Your deposit was 70% of the house price at the time. So it would be fairer to start there and reduce by whatever your husband has put in for extending (has he solely paid for extending or was that split 50/50?)

Extension also split 50/50. We both have grown up kids but none together, which is why it's important to split it for inheritance purposes.

How much is still left in the mortgage?
Other than when he put in the 13k, has it been paid at a steady rate?

Yes it's been paid off at a steady rate, still owe around 57k but we'll be paying it off (split equally) in around a year, before we downsize.

I don’t think this is a divorce situation

Correct.

There are a few approaches you can take, but you need to be pragmatic as not to annoy/upset within your marriage. ( I presume that's the intention!)

I think you you need to consider how much you paid off between 2011-2018 that plus your £150k was your equity before your husband started paying into the house. From 2018 you paid in jointly aside from the £13k.

You should take £150k+ amount paid off 2011-2018, Husband should then get their £13k and then you split the rest equally.

Although if the house was bought for £220 with £150 deposit and you have £57k left, I presume you must have borrowed more at some point, otherwise you haven't really paid anything off in 15years! That may alter how you split

Yes, borrowed another 100k for extension.

Why don’t you take out your £150,000 DH take back his £13,000 then split the rest 50/50 but use it towards the new house, so going forward everything is 50/50 if you ever needed to split assets in the future

I’d work it out phase by phase:

1. purchase position plus appreciation until your marriage
2. marriage and extension until now

If it was worth £300k at the point of marriage, I’d consider that fairly yours. Can you access an old statement to determine how much equity vs debt you held at that point?
The equity at that point I’d then consider fairly to be yours.

He then put in £13k, so work out yours and his relative equity share at the point of marriage/extension. Further appreciation from 300k to 475k can be split equally based on the 50/50 mortgage contributions since.

So if house was worth £300k when you married you had £150k of equity. He had the 13k he paid off the mortgage. Since then you have paid equally so £(475-130-13)/2 each = 322/2=£161each, That makes your share £311k and his £174k. You should own the house in unequal shares or you should have a disproportionate amount of any joint savings to leave your children.

Isn’t it 475-150-13?

But surely I had more equity when we married? Paid 220 with 150 deposit, and when we married it had gone up in value to 300.

Yes, sorry. £150k equity

Were you repaying capital between 2011 and 2018 or interest only? If capital do you know how much you paid?

The rest of the equity was in the mortgage and you have both been paying that off. So £(475-150-13)/2 =£314/2 = £157k each. So your share £307k and his £168k.

Yes, you had 150 plus 80 which is 230

in 2018, when your house was worth £300k, how much mortgage did you have? surely your equity at that point was £300k less the mortgage? Then you also have to account for the £13k your husband put in, then all other equity is split.

I don't remember! Might have to try and find old statements.

Wouldn't it make more sense to work out how much you need to fund your retirement, do the sums on the remainder from there and see whether what you want is affordable? You're married so chuck everything in the pool and get a clear idea of what you want your life to be moving forward rather than looking back.

66/34%
your deposit was 66%
70K mortgage he gave you 13k which is about £180 a month which isn’t a bus ride away from 1/2 the mortgage payments for the 5 years before you were together

No, because we have inheritance to consider and I don't want it to be unfair on my daughter.

If you dont know what your mortgage was in 2018 you can probably get a rough idea if you know how long the term was. If you know what your repayments were and the length of the loan you can use a mortgage calculator like this one https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/

If it was a 20 year mortgage you might have paid off 20% of your debt.

I should have taken that into account.

Unfortunately financial institutions normally only keep paperwork 7 years so unless you have something yourself it'll have to be an estimate.

But surely most of it will be used up supplementing your retirement fund? You've married and plan to merge to the extent it's probably at risk anyway. You've married can't ring fence it in a trust for her because you're planning to spend it. None of this makes sense to me.