“Purchasing a home by borrowing the money requires a down payment on the purchase price, requires that the remaining balance be secured by a mortgage loan, interest is the amount that it costs to borrow the money, the principal is the amount of money paid toward the money borrowed or owed, most loans use a simple interest method, meaning that the interest is calculated after each payment on the remaining loan balance, and most loans are amoritiz[ed] which means that each payment made over the life of the loan is an equal amount.
Apportionment is determining the community and separate interests in an asset. The family residence is usually one of the married couple’s most substantial assets; & community interest & separate interests must be determined at divorce. When purchased before marriage and the title was changed to joint owners after marriage the separate property interest is reimbursed to the original purchaser spouse (FC 2640); and no appreciation is added to the separate property reimbursement. When purchased before marriage and title was not changed after marriage there is a community property interest in the family residence if mortgage payments were paid with community property earnings, a formula is used to calculate the community interest in a family residence, and this formula is called the Moore/Marsden formula, after the two cases In re Marriage of Moore and In re Marriage of Marsden.
The Moore/Marsden formula is used to calculate the community and separate property interests, uses the formula determined by the court in Moore which uses the FMV at date of trial minus the purchase price of the home to determine the appreciation of the home, was then fine-tuned by the court in Marsden by using only the amount that the property actually appreciated during the marriage, and it requires the following information to calculate: the purchase price of the home, the amount the loan principal was paid down during the marriage, the fair market value of the home at date of marriage, the fair market value at the date of trial, and the down payment + principal paid after separation.”
[LW Greenberg, California Family Law]
