How To Buy A Home When You’re Not Married
While buying a home with your significant other before you tie the knot has several advantages, it’s not without its pitfalls.
It’s true. Buying a house and turning it into a home is stressful. So getting it out of the way before you start planning your wedding makes a lot of sense. On the other hand, because buying a house is a complicated transaction, you could be adding further fuel to your heartbreak should your relationship come to a premature end.
So, how do you make sure you’re both protected should you decide to go ahead and buy a house anyway?
Compare Your Credit Scores
Your credit score is going to have a huge impact on your budget, the rate of interest you’re offered and even on whether you can take out a mortgage at all. If you or your partner have a poor score, this may have a significant impact on your ability to buy a home together. With this in mind, it makes sense to start off by comparing your credit scores.
Taking out a mortgage together might make it possible for you to afford a lot more house. However, it can sometimes make more sense for the partner with the better credit score to take out the mortgage and buy the house on their own.
Sure, with just one person on record, the amount of your mortgage may be lower. But by taking out the poorer credit score from the equation, you could secure a significantly better rate. This could save you a lot of money in the long run.
Of course, having just one person on the paperwork can leave the other in a vulnerable position.
Which is why you should:
Open A Joint Bank Account
Opening a joint bank account makes it much easier to stay on top of your home related expenses. This is because it allows you to manage your mortgage payments, taxes, insurance and even maintenance costs from one place.
It also makes it a lot simpler to keep track of both your and your significant other’s house-related outgoings and to untangle your financial affairs should worst come to worst and you decide to end the relationship.
Make Sure Your Home Is Titled Right
Once you’ve made your purchase, you need to decide how you’re going to title your home. You have two main options here: titling it in only one of your names, or holding title jointly. Both these options have their advantages and disadvantages; and which one you go for really depends on your individual circumstances. It’s best to explore your options with a good lawyer before you come to a decision.
With that being said, whichever option you go for, you should definitely consider putting your agreement in writing.
Sign A Written Agreement
Your home is probably the most expensive thing you’ve ever bought. Unfortunately, because you’re not yet married, you may not be afforded all the legal protections you’d have enjoyed had you bought the house after you tied the knot. So it makes sense to sign a written agreement which outlines your respective rights and responsibilities.
Ask a reputable real estate lawyer to take care of this for you. Make sure you put all the details of your agreement in writing, including the amount of money each of you has put up and the percentage of ownership you’re each entitled to. And make sure it’s all in clear, unambiguous language.
Don’t leave anything to chance.
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