If land is acquired by mortgage financing, the title passes immediately to the buyer. Under older cases when land was acquired by mortgage financing, because title passed immediately on purchase, the property was characterized as separate or community at that time. Payments from another estate used to increase equity but did not buy into title. They created a right of reimbursement. Under modern law, the payment on a mortgage is treated as a buy-in of the property when determining pro-rata distribution between estates. Reimbursement is not used. For actual computations:
The first step is to determine the percentage of community payments as applied to principal based on the original purchase price. The percentage of community ownership is determined first as it relates to the entire amount of the original purchase. The balance of the ownership is attributed to the separate estate regardless of cash outlay. This is because that estate is liable on the original promissory note used to secure the mortgage. If the appreciation in value up to marriage is known, it will be added to the separate estate. It will not be added to the pro-rata principal ownership to skew principal ownership percentages. The post marriage ...