Ten years ago, my brother and I bought our first home together. Each of us put in a deposit of $ 10,000 and made a total down of $ 20,000. A year later, I moved to another state for work. My brother took over as a roommate.
After living in a new state apartment for about two years, my wife and I decided to buy a house. I was still taking out a mortgage with my brother, so I had to jump over quite a few hoops to get approval for a new mortgage. Eventually it was approved.
Two years later, my brother wanted to refinance. I was still on a mortgage with him, so I had to submit some documents to refinance. Again, I jumped over some hoops, but everything was resolved and he was able to refinance.
Six more years later, my brother was in the process of turning his house into a rent and buying a second one. He wanted to refinance again, but this time he asked to cancel his mortgage and monetize his investment.
“A year later, I moved to another state for work. My brother took over as a roommate.”
How much do you owe me? His stance: $ 10,000 in, $ 10,000 out. My stance: If I had received $ 10,000 during his first refinancing eight years ago, that money would have grown either in savings or in the stock market. I think the fair return on my investment will be a small return of 5% per year in 10 years.
His initial $ 10,000 investment is now worth the $ 70,000 territory. I’m not asking for a 50/50 split on that return. After all, he took most of the risk by living there. If he and his roommate had stopped paying mortgages, my only exposure would have been in my credit report.
Oh yeah, I had skins in the game — not so many, so it’s a modest return of 5% per year. What do you think is a fair deal in this situation?
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I’m not a big fan of the argument, “If I did this, I would have done it.” You both decided to invest $ 10,000 in this house instead of the stock market. And whether your siblings can afford to buy you eight years ago and / or you wanted, you both took on equal risks and hoop jumps. These risks included the inability of one or both of you to pay a mortgage and / or one or both of you wanting to change the status of your loan agreement.
If you are a mortgage-only co-signer, I agree with the mutually agreed interest rates as a gesture of goodwill, in addition to the return on your original investment. If you were a co-signer and co-owner, your siblings should buy you from a share of your property.
The risk was 50/50 and the reward was 50/50. Yes, he lived there and took care of his property, but you lived in another state and had additional living expenses.
Ownership is based on who’s name is on the certificate, not who chose to live in the house. But what about interest rates that are mutually agreed upon as co-owners, not as co-signers? If you are both open to negotiations, I would suggest taking out both of what you put in it. Anyone who pays property taxes and general maintenance costs should deduct them from the final amount of the other sibling’s share. Then you split it in the middle.
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My brother and I each invested $ 10,000 in a house 10 years ago. Now I want to get out. How much will you be back?
http://www.marketwatch.com/news/story.asp?guid=%7B20C05575-04D4-B545-7575-A7E263415C33%7D&siteid=rss&rss=1 My brother and I each invested $ 10,000 in a house 10 years ago. Now I want to get out. How much will you be back?