Dividing Net Equity Using the Magic of Math by Don Sinkov{2:36 minutes to read} A while ago, I wrote a blog article about “The Magic of Math,” which had to do with dividing equity in the home. Somehow there was a lot of confusion, so I decided to clarify and perhaps do a better job of explaining this concept.

When a couple jointly contributes to the down payment on their house, and there is a sale, they will usually divide the net equity in half. However, if one spouse paid the down payment through separate funds before the marriage, they are usually allowed to deduct that, and then divide the net equity.

It sounds simple, but maybe it’s not. A question I’m often asked is:

  • Do we divide the net equity in the house first, and then one of us gives to the other the separate property down payment, or
  • does the separate property down payment come out first, and then we divide the net equity?

When one person has paid a separate property down payment, the first thing to do is divide the net equity in half. At that point, you will each have 1/2 of the joint dollars in the house. Now the person that did not pay the separate property down payment pays the separate property down payment to the other.


Net equity in house is $100,000. Wife’s separate property down payment is $20,000.

If you take the down payment out first: The wife gets $20,000 plus half the remaining equity, $40,000. The wife gets $60,000 total.

If you take the wife’s $20,000 down payment last: The wife gets half of $100,000, or $50,000. The husband pays the wife the $20,000 down payment from his share. The wife gets $70,000.

If you do it the wrong way, the wife loses $10,000 of her separate property down payment.

Simple, right?

When coming in for a mediation session, just bring in all the required paperwork and let the mediator explain to you the how to construct an economic settlement using “the Magic of Math.”

About Don Sinkov

Don Sinkov Your Divorce Mediator Westchester County, NY Putnam County, NY Phone: (914) 588-6258 eMail: Info@YourDivorceMediator.com