Purchasing a Home Together When You’re Not Married

A couple doesn’t have to be joined in matrimony to buy a home together, but it’s important to understand that you are still making a huge commitment.  And being unmarried does present some challenges for home buyers. So, before you begin your home search, here are some important things for you to consider:

SHARING FINANCIAL INFORMATION

If you’re going to buy a home together, then you need to be transparent with each other regarding your finances. You don’t want to meet with a lender only to be blindsided by something that your partner didn’t share with you.  So, it’s vital that you review all your financial history with your partner, including your credit score, income, and any debts that are tied to your name.  By doing this, you will not only be able to determine if you both have good credit, but you will also get an idea of how much house you can afford together.

HOW YOU’RE GOING TO SPLIT EXPENSES

You might already be living together; in which case you may have a system in place for who pays what expenses. But things can be more complicated with a mortgage in the picture. You need to discuss this before you start the home buying process. The first thing you need to figure out is how you’re going to split the down payment and closing costs when you buy a home together.  And if you will be living together for the first time, it would be smart to discuss how you will split the monthly bills including your mortgage, utilities, and home maintenance. What if there is need for a costly, emergency repair? You may want to consider opening a joint bank account that exists only to cover home expenses. It’s also a good idea to meet with a real estate attorney so you can get everything in writing and have a legally binding contract just in case things don’t work out down the road.

EDCUCATE YOURSELF ABOUT OWNERSHIP OPTIONS

You are buying a home together and splitting the expenses, but whose name is going to be on the title?  This is something that requires serious thought because it can have a significant impact on your future.  There are three options to choose from:

• Joint Tenancy

Property is owned equally and if something happens to one owner, the second owner automatically inherits the other’s stake and becomes sole owner of the property.

• Tenancy in Common

Each partner owns a pre-determined percentage of the property. Should something happen to one or the other, the ownership interest would go to whomever is specified in a living will, will, or trust. If none of those are in place, the interest in the property would go to the next of kin and not to the significant other.

• Sole Owner

For some couples it might make more sense for one person to have full ownership of the home even though you are splitting expenses. For example, if one person has poor credit and won’t qualify for a mortgage loan, then the person getting the loan would be the sole owner of the home.

Determining ownership should not be taken lightly. It’s probably the most important decision you will make when buying a home with someone you aren’t married to. Keep in mind that if you are splitting the costs of the home, but you aren’t on the title, you probably won’t be able to enjoy the tax perks of being a homeowner.

LOOK FORWARD

Whether you are married or not, everyone should think about where you see yourself in 3 to 5 years.  There is a lot to consider.  Do you have job stability?  Is it possible you will need to move soon?  Do you want to start a family?  These are just a few questions to ask yourself before taking on the commitment of home ownership.  It’s crucial that you have a heart-to-heart talk with your partner about your future before you start your home search!

There are many things that can make a buyer fall in love with a house at first sight. A professional Realtor like Mike Manosky can help you get your house listed and sold for the best possible price!  Call him today at 256-508-0211.