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TaxTom, Internet Researcher
Category: General
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I have a tenants in common mortgage agreement with my partner.

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I have a tenants in common mortgage agreement with my partner. We are now splitting up and I am hoping to buy her out. The inital deposit was not equally split. I paid 82% she paid 18%. The mortgage repayments are equally split and we are now 8 months into the mortgage. So we have each repaid a equal small amount. The property value looks like it has increased in value. How is this increase split? on the equity percentage so far i.e. around 82% 18% (altered to reflect small amount reapaid). Or is the remainder of the mortgage taken as 50:50 ownership and that percentage added to our actual equity?
Submitted: 7 years ago.
Category: General
Expert:  TaxTom replied 7 years ago.
Hello, the split would usually made the same as you ownership. So you would take the current value (since it has only been 8 months it may be reasonable to use original cost) and subtract out your initial investments and split the difference between mortgage and value. So if you bought the property for 100,000 and paid down 20,000 and assuming the property has not risen in value and the mortgage balance is 79,000 you would pay $3,600 (original deposit) plus $500 equity ($1,000 principle payment divided in 2) for a total buyout of $4,100. Any additional increase in value would be split 50:50 and added to the payout. Keep in mind that you are taking the burden of the debt so do not pay to large a premium on the assets. Thank You Tom please click accept.
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