BUYING A HOME AS AN UNMARRIED COUPLE

Not ready to get married, but ready to buy a home? While buying a house with your significant other can feel like an exciting next step, it’s important to know the laws in your state and dictate how the property is to be handled in the event of separation or death. The first step is to exchange personal finance information, including salaries, debt, and credit scores, so there are no surprises when applying for a mortgage.

Once you’ve created a budget and decided how to split the costs of buying & maintaining the house, you will need to decide how you want the title to be held — sole ownership, joint tenancy, or tenants in common (don’t worry, I’ll explain all three).

① One person can hold the title as “SOLE OWNER”
If you or your partner’s name is the only one on the deed, he or she is the only legal owner. This means that you (or your partner) can sell the home without the other’s permission.

② Both people can hold title as “JOINT TENANTS”
This arrangement is suitable when you both own equal shares of the house. The biggest benefit of joint tenancy is that neither can sell the house without the other’s permission.

③ Both of you can share title as “TENANTS IN COMMON”
This is the most common way for unmarried couples to take title. This is because this arrangement allows you both to own an unequal share of the home, and if one person dies, that partner’s share can be left to whomever the person wishes.

Additionally, if you or your significant other have poor credit, your lender may advise you to only put one of you on the loan. It’s important to keep in mind that If you decide to leave one person off the mortgage but both parties are on the deed, the person who is on the mortgage holds the legal responsibility to repay the loan.

Unmarried couples buying a house certainly plan to stay together but plans often change. By planning ahead, you can help make an already painful situation a little less difficult.

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