Friday, July 12, 2019 / by Harvey Rosenberg
How to Buy a Home together if You're Not Married
Whether your partner and you have joint accounts or not, it's important to talk financials Be clear about your debt, savings, and your expectations going into this home. Will it be 50/50? Will you both be on the loan?
What about the down payment? Can you afford to put 20% down? Most cannot, but that doesn't mean you can't buy a home together.
While married couples are generally assessed by creditors as one, unmarried couples are assessed as individuals, even if you apply together. Therefore, both need to have good credit to secure good rates, or if only one person is on the loan, then only one income is on record as well. This determines the amount you qualify for.
Regardless of who is on the loan, make sure you're credit is on the up and up. If you need to improve your credit, work on doing that before you start the loan process. Click here to read 5 of our tips to get you started on improving your credit score.
Put it in Writing
Unmarried couples should put the everythi8gn in writing with an attorney before entering into a large mortgage purchase. If you've both agreed to pay the mortgage but it's only in one person's name, someone could be left high and dry if you split up.
Things to include should be mortgage payments, down payment, property taxes, HOA fees, insurance, and even things like utilities.
Discuss just how much debt you're comfortable with as well. It may not be wise to borrow the maximum amount you qualify for. Remember financials are one of the top reasons couples disagree, so it's important to get that in writing as well.
While one person may be on the mortgage, you'll need to decide on the home title. While you can put only one of you on the title, consider doing joint tenants. This way if something were to happen to the title owner, the other partner isn't left without equity or a home to live in.
Another option is tenants in common, but the ownership doesn't automatically transfer to a survivor unless stated in a will.
No matter what you decide, buying homes as an unmarried couple is on the rise. Be sure you find a realtor comfortable walking you through the process along with a lawyer familiar with setting terms and agreements.