Maths question - can't get my head around it
Discussion
So, I own 33% of a house (£40k). Person 2 also owns 33% and there is 33% mortgage (£30k) on it totalling £110k
Fast forward a few years and the house is worth £220k
So is my equity now worth double? I think yes but if I work out 33% of £220k its £72k. What have i got wrong/am I missing here?
(You can ignore the mortgage payments as they are nothing to do with me)
Fast forward a few years and the house is worth £220k
So is my equity now worth double? I think yes but if I work out 33% of £220k its £72k. What have i got wrong/am I missing here?
(You can ignore the mortgage payments as they are nothing to do with me)
Frimley111R said:
So, I own 33% of a house (£40k). Person 2 also owns 33% and there is 33% mortgage (£30k) on it totalling £110k
Fast forward a few years and the house is worth £220k
So is my equity now worth double? I think yes but if I work out 33% of £220k its £72k. What have i got wrong/am I missing here?
(You can ignore the mortgage payments as they are nothing to do with me)
Assuming nothing paid off the mortgage it's still 30k, so between 2 of you, you have 220-30=190k so 95k each.Fast forward a few years and the house is worth £220k
So is my equity now worth double? I think yes but if I work out 33% of £220k its £72k. What have i got wrong/am I missing here?
(You can ignore the mortgage payments as they are nothing to do with me)
(You don't own 33%, you own 40/110=36.36%.)
so you now own the same percentage of the current value that you did of the original value, whatever that is because youve changed what you owned and simplified (i.e. complicated) it in your follow up posts
if it was 40k of 110 then thats 36.36363636363%
so if its now worth 220k you own 80k, ie double as the hous value has doubled.
if it was 40k of 110 then thats 36.36363636363%
so if its now worth 220k you own 80k, ie double as the hous value has doubled.
The house is now 220, deduct the mortgage of 30k leaves 190 equity which you own half of so 95k. But your figures in terms of percentages were a touch out.
But you may need to double check how you own the property, TiC or not or what as you seem a touch confused and this can affect the numbers of course.
I also ignored the question of whether this was an IO or repayment mortgage for ease.
But you may need to double check how you own the property, TiC or not or what as you seem a touch confused and this can affect the numbers of course.
I also ignored the question of whether this was an IO or repayment mortgage for ease.
Jasandjules said:
The house is now 220, deduct the mortgage of 30k leaves 190 equity which you own half of so 95k. But your figures in terms of percentages were a touch out.
But you may need to double check how you own the property, TiC or not or what as you seem a touch confused and this can affect the numbers of course.
I also ignored the question of whether this was an IO or repayment mortgage for ease.
Sorry I don’t think that is right. I’d assume if person 2 put in cAsh as well as took the mortgage out then any equity increase should be in the ratio 40:60But you may need to double check how you own the property, TiC or not or what as you seem a touch confused and this can affect the numbers of course.
I also ignored the question of whether this was an IO or repayment mortgage for ease.
OP has confused the percentages but assuming:
Person 1 put 40% in. Person 2 put 30% in and took out 30% mortgage then for the £110,000 equity increase...
Person 1 gets 40% of the increase = £44,000 and person 2 gets 60% of the increase = £66,000
But OP didn’t give correct percentages so can’t work out properly.
Jasandjules said:
Well it could be even simpler, it could be a 50/50 split on the house with the other person having a 30k mortgage for a part of their share. At which point his share is worth 110....Sadly the OP doesn't seem to know....
You could be right!! It depends on their agreement plus actual percentages. Gassing Station | The Lounge | Top of Page | What's New | My Stuff