Moving in and equity

4 Replies

I am going to move into my boyfriends house he has owned for 6 years. I will be put on the deed and pay 1/2 the mortgage of 80k,since the loan is only 6 years old it's basically what he paid for the house. He has done some updates and now the house is worth 130,000. He is asking for 25K in the case if we break up and we have to sell the house I will get half of the 130 K. However things still need to be done to the house so not only would I be giving him 25,000 in move-in and have to pay off half the mortgage . There are things that still need to be done to the house and I'd probably have to give him another 5K for my half of finishing up. Is that a fair deal?

@Carla Takats I would recommend not going through the deed or mortgage process until you get married. I’m the interim, pay whatever you both think is agreeable for rent (1/2 of the mortgage and utilities sounds reasonable). If you both decide to renovate the kitchen, figure out a reasonable split, as if you were a renter.

If you do happen to break up, then it’s clean. No financial difficulties, no need to sell the house or one person pay off the other. Just go your own ways.

When you get married, then go through the deed process. It’ll also make more sense as the state has appropriate laws in place for tenancy and survivorship for married couples.

@Carla Takats ah, that does potentially make a difference. Not age, but plans for the future. 
In terms of your deal, in my mind, I would pay him half of the cash he put into it, not the current value. The current value can go up and down, all that really matters is how much cash was paid at closing (5%, 20%, etc). Then split any ongoing or renovation costs. 
the idea is you have the exact same capital in the house at any point in time, so if you sell or whatever, it’s a nice clean calculation of 50/50. 
but ultimately, it’s whatever you both feel comfortable with.