Expert: Dick Dennis - 11/30/2006

Question
Thank you again.
It seems I need to include more details to help you...to help me...:)
My boyfriend lives in this house ~ 20 years and I've moved in to help him financially. That reason I pay 900$ but it is already over one year and I think it is not fair. There is still ~200,000 to pay (house is worth ~800,000.
I really do not know how to calculate my contribution and how to make it fair for both of us.
I hope it was my last question,
You are GREAT!!
Ela

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The text above is a follow-up to ...

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Thank you very much.
Yes, we live together but he already paid off big chunk of this property.
How to calculate my input ?

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Dear Dic,

I've moved to my boyfriend house over one year ago. I pay him $900 "rent" (his mortgage is $1,600). Recently I've start talking about making things right. I want to settle some agreement about ownership of this house. I do not want to pay every months w/o getting anything back.
If something happen to him I will be on the street (at least legally).
Situation is pretty complicated but he is willing to make some agreement.
Could you suggest something reasonable?

I really appreciate your help,

Ela
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I presume you do not live there with him and live there alone, Ela. If that be the case, then I would suggest a lease/option that would allow you to apply some (or all) of your monthly payment towards the down payment when you decide to purchase the property. I would suggest you consult with a real estate attorney to make sure your interests are protected.

If you are living there with him, then you might want to be on title to the property with him. He can execute a quit-claim deed giving you 50% or whatever percent interest in the property you agree to. Whatever agreement is worked out, I recommend you have a real estate attorney put it together for you. You just do not appreciate the costs you save by doing that if and when you should ever break up with your boyfriend. And you have no idea how many questions I have answered based on breakups. You really should protect your interests.

I do wish you well.

Dick Dennis

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Then I don't understand why he requires rent from you.

Otherwise, you would pay him half of what he has already paid in (principal only). Example: If he paid $10,000 as down payment a year ago and then paid, say, $200 per month in principal each month, then he would have paid in $12,400 total. YOu would then pay to him $6,200 to be 50% owner. He would then give you a quit-claim deed for 50% equity in the property. The interest he has paid all this time is his to use for his income tax reporting and benefit. If he is willing to give you credit for the "rent" you paid so far, then that would help you towards achieving that 50% equity. If not, you start from square one as stated above. What ever you decide to do you both MUST put down in writing what you are doing with a REAL ESTATE attorney.

Dick Dennis

Answer
Well, let me try it a different way, Ela. If his mortgage is $200,000 and you have paid a year's worth at $900, that means you paid $10,800 for a year. You have not told me what the TOTAL monthly payment was. I have to know what percentage of the total monthly payment that $900 represents. Without knowing that, I cannot help you.

Dick Dennis