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scenario: Home value is 800K.

Three investors requiring a mortgage.

  • One investor can add 70K deposit,
  • Two can add 40K each.

Question #1: How do I figure out the % of ownership based on different deposits on a mortgage?

Question #2: What would be the portion of monthly payment for each?

Two of the investors will live in the property and the other does not. (If none lived in the home, the rent would be 3K that would cover mortgage and taxes.)

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    Which country are you talking about? – Dilip Sarwate Dec 27 '20 at 17:19
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    Normally you'd work with a lawyer to agree on the ownership and obligation before the house purchase. – Robert Longson Dec 27 '20 at 17:34
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    Simple math says that 70 is 46.66% of the sum of 70+40+40, and 40 is 26.67% of the sum. (Needed to do a bit of rounding.) – RonJohn Dec 27 '20 at 17:51
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    Also, question #2 is completely separate from question #1. And the fact that two will live there is irrelevant. I completely agree with @RobertLongson: you all must talk to a lawyer, because there are a lot of sticky details which must be ironed out before the deal. – RonJohn Dec 27 '20 at 17:54
  • Assuming everyone pays the mortgage evenly moving forward then the $70k person has 35.83333333% ownership. – MonkeyZeus Dec 28 '20 at 15:10
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There is no standard way to determine the answer to the second question:

Question #2: What would be the portion of monthly payment for each?

Two of the investors will live in the property and the other does not. (If none lived in the home, the rent would be 3K that would cover mortgage and taxes.)

You would have to assign a fair market value for the rent, and then balance that against how the monthly payment is being split. The FMV isn't the amount of money needed to cover the market and the taxes. Sometimes the rent that you can charge is more than mortgage and taxes, and sometimes it is less.

You may find that the ownership percentage moves from the initial split each month depending on how the monthly payment is split.

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What do you want to know specifically:

What percentage is each person entitled to?

(((((800,000-150,000)/3)+70,000)/800,000)*100) = 35.833333333% - for the $70k person

(((((800,000-150,000)/3)+40,000)/800,000)*100) = 32.083333333% - for the two $40k people

It would be much easier for each person to just do a $40k down payment unless you're trying to avoid PMI or something but $150k of $800k is 18.75% so you would still need PMI.

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How much does each person need to pay monthly to have 1/3 ownership evenly?

This is tough because the person with higher ownership would need to be put on a sliding scale to go from their rightful 35.8% ownership down to 33.33% as time progresses.

You really need a good lawyer and accountant to figure out the contract and figures. Napkin math is only gonna lead to guaranteed disputes. Don't forget that you will need to equally account for repairs and renovations.

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