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# not related to computers, but need a geek..

nntp.aioe.org
Guest
Posts: n/a

 02-28-2008
Maths time
My brain is just not working and my answer seems wrong..

2 people own 1 house.
one wants to buy the other ones half out

The house is currently valued at 400k
remaining on the mortgage is 190k

How much should be offered to the other party to buy out exactly one half

My answer was \$295k but it just doesnt feel right

My other question is to buy out someones half, Do you go by current
market house rates, OR do you just work it on the original borrowed amount?
how do these things work.

i believe the house was purchased for \$220k

EMB
Guest
Posts: n/a

 02-28-2008
nntp.aioe.org wrote:
> Maths time
> My brain is just not working and my answer seems wrong..
>
> 2 people own 1 house.
> one wants to buy the other ones half out
>
> The house is currently valued at 400k
> remaining on the mortgage is 190k
>
> How much should be offered to the other party to buy out exactly one half

\$200K and take over the mortgage if current value is what is agreed as
the "value" of the house.
>
> My answer was \$295k but it just doesnt feel right
>
> My other question is to buy out someones half, Do you go by current
> market house rates, OR do you just work it on the original borrowed amount?
> how do these things work.
>
> i believe the house was purchased for \$220k

So there's only \$30K of equity based on the original purchase price
(effectively none). I'd allow half the capital gain in doing the sums
and call \$310K the "value" and be willing to pay half that as a maximum

The only foolproof way not open to argument is to just sell the
property, settle the mortgage and spilt the proceeds evenly.

nntp.aioe.org
Guest
Posts: n/a

 02-28-2008
EMB wrote:
> nntp.aioe.org wrote:
>> Maths time
>> My brain is just not working and my answer seems wrong..
>>
>> 2 people own 1 house.
>> one wants to buy the other ones half out
>>
>> The house is currently valued at 400k
>> remaining on the mortgage is 190k
>>
>> How much should be offered to the other party to buy out exactly one half

>
> \$200K and take over the mortgage if current value is what is agreed as
> the "value" of the house.

interesting, Can you tell me how you reached that number? - basically if
i pass on the message i will be asked why that amount

>>
>> My answer was \$295k but it just doesnt feel right
>>
>> My other question is to buy out someones half, Do you go by current
>> market house rates, OR do you just work it on the original borrowed
>> amount?
>> how do these things work.
>>
>> i believe the house was purchased for \$220k

>
> So there's only \$30K of equity based on the original purchase price
> (effectively none). I'd allow half the capital gain in doing the sums
> and call \$310K the "value" and be willing to pay half that as a maximum
>
> The only foolproof way not open to argument is to just sell the
> property, settle the mortgage and spilt the proceeds evenly.

I agree, But i have been told to find out

shane
Guest
Posts: n/a

 02-28-2008
nntp.aioe.org did scribble:

> Maths time
> My brain is just not working and my answer seems wrong..
>
> 2 people own 1 house.
> one wants to buy the other ones half out
>
> The house is currently valued at 400k
> remaining on the mortgage is 190k
>
> How much should be offered to the other party to buy out exactly one half
>
> My answer was \$295k but it just doesnt feel right
>
> My other question is to buy out someones half, Do you go by current
> market house rates, OR do you just work it on the original borrowed amount?
> how do these things work.
>
> i believe the house was purchased for \$220k

105k
400k/2 - 190k/2

--
Hardware n: Parts of the computer you can kick

peter
Guest
Posts: n/a

 02-28-2008
nntp.aioe.org wrote:
> 2 people own 1 house.
> one wants to buy the other ones half out
> The house is currently valued at 400k
> remaining on the mortgage is 190k
> How much should be offered to the other party to buy out exactly one half

Who has the mortgage?
If they have joint ownership of the house and have jointly taken out the
mortgage, then they each currently have 105k net equity in the house.
If the house is valued at 400k, the person should offer 200k to buy out the
other half. The person selling would pay off their half of the mortgage
(95k) leaving them with their half of the net equity (105k).

HTH

Peter

nntp.aioe.org
Guest
Posts: n/a

 02-28-2008
nntp.aioe.org wrote:
> Maths time
> My brain is just not working and my answer seems wrong..
>
> 2 people own 1 house.
> one wants to buy the other ones half out
>
> The house is currently valued at 400k
> remaining on the mortgage is 190k
>
> How much should be offered to the other party to buy out exactly one half
>
> My answer was \$295k but it just doesnt feel right
>
> My other question is to buy out someones half, Do you go by current
> market house rates, OR do you just work it on the original borrowed amount?
> how do these things work.
>
> i believe the house was purchased for \$220k

i came up with \$295 from:
half of whats already been paid + remaining mortgage = 105k +190 = 295
400-190=210
210/2 = 105

if based on purchase price
half of whats been paid already 220k - 190k = 30k
\$30k plus remaining mortgage
\$15k + 190 = 205k

EMB
Guest
Posts: n/a

 02-28-2008
nntp.aioe.org wrote:
> EMB wrote:
>> nntp.aioe.org wrote:
>>> Maths time
>>> My brain is just not working and my answer seems wrong..
>>>
>>> 2 people own 1 house.
>>> one wants to buy the other ones half out
>>>
>>> The house is currently valued at 400k
>>> remaining on the mortgage is 190k
>>>
>>> How much should be offered to the other party to buy out exactly one
>>> half

>>
>> \$200K and take over the mortgage if current value is what is agreed as
>> the "value" of the house.

>
> interesting, Can you tell me how you reached that number? - basically if
> i pass on the message i will be asked why that amount
>

Yeah - I had a major brain fart (shouldn't talk on phone and post at
same time). It's so wrong as to be laughable. \$105K and take over the
equity, although the actual amount should be less to take into account
the costs involved in doing the sell and split I mentioned in my last
post. Somewhere between \$90K and 95K is probably in the right region.

nntp.aioe.org
Guest
Posts: n/a

 02-28-2008
peter wrote:
> nntp.aioe.org wrote:
>> 2 people own 1 house.
>> one wants to buy the other ones half out
>> The house is currently valued at 400k
>> remaining on the mortgage is 190k
>> How much should be offered to the other party to buy out exactly one half

>
> Who has the mortgage?
> If they have joint ownership of the house and have jointly taken out the
> mortgage, then they each currently have 105k net equity in the house.
> If the house is valued at 400k, the person should offer 200k to buy out the
> other half. The person selling would pay off their half of the mortgage
> (95k) leaving them with their half of the net equity (105k).
>
> HTH
>
> Peter
>
>

Its tricky to get my head around it, But i believe you are saying that
the person buying the house out would need a \$295k mortgage to complete it

I think you have said exactly what EMB has said on his second go, In
completely different words

peter
Guest
Posts: n/a

 02-28-2008
nntp.aioe.org wrote:
> peter wrote:
>> nntp.aioe.org wrote:
>>> 2 people own 1 house.
>>> one wants to buy the other ones half out
>>> The house is currently valued at 400k
>>> remaining on the mortgage is 190k
>>> How much should be offered to the other party to buy out exactly one
>>> half

>>
>> Who has the mortgage?
>> If they have joint ownership of the house and have jointly taken out the
>> mortgage, then they each currently have 105k net equity in the house.
>> If the house is valued at 400k, the person should offer 200k to buy out
>> the
>> other half. The person selling would pay off their half of the mortgage
>> (95k) leaving them with their half of the net equity (105k).
>>

> Its tricky to get my head around it, But i believe you are saying that
> the person buying the house out would need a \$295k mortgage to complete it

Yes
The person buying is buying half the house. If the house is valued at 400k,
it means they need to find 200k to buy the other half. If they fund this
by mortgage (ie a 200k mortgage), and they already have 95k mortgage (half
of the existing 190k mortgage), then they will end up with 295k mortgage.

The person buying will have their original 105k equity, and the rest of the
house is funded by mortgage (295k).

HTH

Peter

Smoking Causes Lung Cancer (SCLC)
Guest
Posts: n/a

 02-28-2008
On Thu, 28 Feb 2008 21:22:15 +1300, nntp.aioe.org wrote:

> Maths time
> My brain is just not working and my answer seems wrong..
>
> 2 people own 1 house.
> one wants to buy the other ones half out
>
> The house is currently valued at 400k remaining on the mortgage is 190k
>
> How much should be offered to the other party to buy out exactly one
> half
>
> My answer was \$295k but it just doesnt feel right
>
> My other question is to buy out someones half, Do you go by current
> market house rates, OR do you just work it on the original borrowed
> amount? how do these things work.
>
> i believe the house was purchased for \$220k

If the house is valued at \$400K, and it is owned by two persons, then to
each it is worth \$200K.

--
Smoking Causes Lung Cancer

Franklin D Roosevelt: "We have always known that heedless self-interest