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House buying dilemma..need honest opinions please

Bettysmith00's picture

This "issue" keeps coming up and need opinions on WHAT you would do. 

Ten years ago DH purchased a house and put $150,000 down. I was dating DH but not living with him at the time.

Three years later we got married and I moved out of my apartment into DH house. DH added my name to the house and we started splitting mortgage/taxes/house insurance and household bills 50/50. 

When I first moved in DH wanted me to put $150,000 into the house like he did but I refused as that would Literally clean me out of all my savings. 

Now we are selling this house and buying another. Again DH "feels" since he already kicked in $150,000 upfront I should be the one to do it with the next house. 

The main reason I'm nervous about doing this is DH has spoiled rotten kids who always have to have the best. DH already said he's going to pay for college for them. I DO NOT want to dump $150,000 into a house only to have DH borrow against it to pay for junior's education. I told DH this and he said he never would BUT where else would the money come from? 
So my question is DH wrong to ask me to match the money he put into his house? 
Second is there anything legal I can do to prevent DH from taking a loan out on our house to pay for Stepbrat college?


AlmostGone834's picture

How about taking the first 150k from the sale of the house and using that as a down payment then splitting the rest of the proceeds 50/50? Then it won't come from your savings, it will just be like the down payment transferred over to the new house?

2Tired4Drama's picture

How much more will the house sell for than it was purchased?  That's the big question.  In this real estate market, I would expect there will be a profit.

Keep in mind that you have a 50% equity on seven years' worth of house payments. While your DH may have put $150K down, both of you have been paying into the house equally for the last seven years.  Make sure you include that as part of your overall calculations.

Also, how do you keep your finances?** It sounds like they are separate, which is often a good thing.  If that's the case, then consider this: After sale of house, DH gets his $150K back/credited, 100% of three years equity and 50% of seven years equity. You get seven years of 50% equity. 

Then look at the new house purchase strictly from a 50/50 perspective. You each put in half of the down payment from your own funds and split the payments as you have been.  You MUST have your name on the mortgage and deed!

**Based on what you've written about your SS, I would highly encourage you to keep your finances separate.  That kid sounds like he is heading for legal trouble and I am quite sure your DH would go bankrupt to pay for legal fees or whatever else the kid needs. 


ndc's picture

If you're on title to the house your DH won't be able to use it as collateral for a loan unless you sign the mortgage also.   You may not need to sign the note, but you would definitely have to sign the mortgage. So he can't do it without your agreement. 

Winterglow's picture

How much of a down payment would you need? I suggest that he takes the first 150K from the sale and the rest (jointly owned) goes to a down payment continued by splitting the bills as before. What he does with the money is his business - if he decides to pay for his kids' education with it then that's up to him.


ESMOD's picture

My thought is that he should be getting his 150K plus approx appreciation at the time you started contributing.. then you would split the appreciation from the time you started contributing to the home.

So.. let's say it was worth 50K more than he paid for it when you started paying. he gets the first 150 plus 50K of net proceeds from the home.. then the house has appreciated another 80K since you started paying.. so you would each get 40K of that appreciation.  (obv there can be adjustments for realtor fees and other sales costs that have to be figured into the above.. ).

Ideally.. at the time you moved in and were put on the home.. you should have "bought in" to the home.. not necessarily by MATCHING his downpayment.. but perhaps by paying him for 50% of the appreciated value of his downpayment.  so.. 75K plus appreciation to date.

For your new house purchase.. is he advocating that he put down zero (which means he takes a huge cash amount back out?).. and you put down 150K "instead" of him?

I don't like that.. in this new house.. you should be putting in an equitable amount.. so you need to decide how much total you want to put down.. and split that 5050.. of course.. he will get a much larger share of the proceeds of the house sale.. because of the initial downpmt.. and THAT is how it becomes fair.

ESMOD's picture

I'm also actually curious.. how much down are you guys really paying?  I mean.. I guess if the goal is to reduce interest paid.. and you want to put as much as possible.. that's one thing.. and if he is talking about rolling his initial 150K into the new house and he wants you to match it.. and you agree with the goal of keeping pmt low.. it wouldn't be fair to expect him to roll his 150K in and you not do similar.

BUT.. 300K down on a home? unless you are talking about a very expensive property.. do you NEED to put down so much? 

I think you should be buying and financing a home that you are both jointly comfortable doing.. both your share of the downpmt as well as the monthly payment.

CLove's picture

300, well maybe in MY area...

But I agree with others. You asked two different questions, and here are MY answers:

1. Is it fafir that only YOU put in 150k. Nope. Because in most states, marital assetts are community property. Meaning everything 50/50 after the marriage started. As others have mentioned, take his 150 and give it back to him, then you BOTH put half down on new property. What you get as your half of sale is minus the 150 he put in.

2, How to protect yourself from him overspending on stepbrat. He will need your signature to take out loans on the house. So watch that. Any personal loans and credit cards will be noted on his social security number, which you can easily track using credit karma apps. Definitely get wills in place etc...meaning if you have a good amount of assets between you two make certain they are not available except to whom you want them to be.

Rags's picture

Roll the rest into the downpayment on the new home.  You own half of the market value growth from the time you were put on the Deed.  

This gives him his initial down payment back then you and he share in the remaining profit rolling into the new home as the down payment.

It does leave in question the market value growth from his initial $150K but if that too rolls into the down payment on the new home, it should not necessarily be a point of contention.

Just my thoughts of course.

ESMOD's picture

I think the issue of contention is that he would want her to be contributing "equally"  so if he rolls all the gain before and after she started to contribute.. was that a substantial imbalance.. the "before" part?  should she then put a little more in to equalize it.. does he want to put more down.. but she isn't up for paying half of 300K?

I don't know if it's a fight over 10K or 100K of appreciation before/after.. in the spirit of comunal peace.. there should be some way to come to a fair compromise.

I would be sure that both property owners would have to sign to take any equity loan out.. to make sure he didn't give it to his kid.

Though.. maybe if there is that need.. they should be putting less down so he can conserve some of his 150K so he can help his kid with school if that's what he wants to do?  (that is his money right?)

Rags's picture

Assets are in question.

In our case.  Pretty much all we had when we married was two 8yo cars, two apartments full of college furniture, and my fresh Engineering sheep skin.

Those who enter follow on marriages where're there are prior assets and failed or prior family progeny have a much more complex situation then my DW and I do.

Miss T's picture

I'm concerned about the likelihood that your DH will want to dip into house equity to fund his kids' educations. You may have protection if you're on the mortgage, but it is possible that your DH will be very convincing when the time comes for you to sign on the dotted line.

Hire an attorney of your own (who will then be obligated to protect your interests) before agreeing to anything here. If you can find one with a background in finance or who deals with personal financial issues such as trusts, you'll be increasing your odds of getting the best possible advice. Your local bar association can help you find someone like that, and also can steer you to one who offers a low cost initial consultation. 

Legal advice is expensive but screwing this up could cost far, far more. And knowing that your concerns have been addressed in black and white will give you priceless peace of mind.

la_dulce_vida's picture

If 150K is YOUR savings, do NOT put it into a house with your husband. If you do, you're essentially giving him half of the money. If he has more money saved for retirement, let him roll his 150K (accounting for the increase on that investment) into the new house with your share of the increased value of the home.

What you need to be careful about is a scenario where if you and he both put in 150K to the house and buy a 300K house, and he dies suddenly, you will be out of savings and he may leave his share of the house to his kids. That means you'd either have to buy them out by getting a mortgage for that 150K or you'd have to find a new place to live.

You both need to meet with a lawyer. There are ways to protect both of you, but whatever you do, do NOT co-mingle your money with his until you are sure you're protected.

It would be so sad if you put ALL of your savings into the house and ended up with no place to live and only 1/2 the value of the new house.