3 Things For Couples To Consider When Buying A Home Before Marriage

3 August 2015
 Categories: Real Estate, Articles


Marriage is increasingly becoming a venture that people embark on later in life. While it was common to get married in your late teens or early twenties at the start of the century, the average age has increased to around 27 for women and 30 for men. However, waiting this long to buy homes for sale in your area can leave you with a large mortgage when you retire, so you may wish to buy a home with your partner earlier in life. If this is the case, there are a few things to consider before signing your mortgage agreement:

Be Entirely Open With One Another

Many would argue that the key to a healthy relationship is openness between partners; however, this is even more important when it comes to buying a property together. Married couples have somewhat of a legal safety net should their union fall apart, but as an unmarried couple you are left to fend for yourselves. As such, make sure you are entirely open with one another about your current financial situation and any bad credit you may have hidden in the closet until now.

When it comes to buying a property together, your entire financial history will be available for the other person to see. They will know about your credit card debt, your missed payments, your hidden savings, and even how many times you have applied for credit in the past few years. Therefore, making sure you are open and honest with your partner before applying for a mortgage will save countless arguments (and red faces) once you are in front of a lender.

Consider the Title of Your Property

The title of your property doesn't refer to what you call your home (that's entirely up to you); rather, it determines legal ownership and who the property will be passed on to in the event of death. The legalities behind taking the title of your property in an unmarried partnership will depend on which state you are currently living in. Unfortunately, some states will only grant community ownership to married couples. This means that effectively each partner owns 50% of the property and can do what they please with that share in their last will and testament.

As an unmarried couple, you'll have to be a bit savvier with the options available. You may be able to sign for the property as common tenants, giving both of you an equal ownership in the property. While this will offer some protection in a legal dispute, it may not be enough to convince the courts. As such, consider signing a legal agreement (effectively a homeowner's pre-nup) before purchasing the property.

A legal agreement signed by both parties will outline what is to be done in the event of separation or death. If you wish, you can design this agreement to give both parties the same homeowner protection offered by marriage. Of course, you may also choose to add or remove elements from this agreement, so consider talking this over with a qualified real estate attorney before making a final decision.

Discuss How You Will Manage Costs

When it comes to buying anything that comes with a long-term commitment, it's important to plan your costs accordingly. However, this is even more important when there are two of you, so talk with your partner early in the process to establish how you are going to manage the costs incurred.

The first thing you should consider is opening a joint account. While this may seem trivial, having a communal account that is used only for house-related payments can save you major headaches down the line. Opening a joint account that you can deposit a fixed amount into each month will reduce the amount of disagreements you have and help ensure there is always enough to cover the major costs come the end of the month.

The next thing to consider is how you are going to split the costs between the two of you. It's important to reach a mutual understanding on this early in the process as leaving it until afterwards can cause tension. Essentially, the way you split your income is a decision for both of you to make; however, using percentages rather than fixed amounts is usually the best idea. This way, each partner pays a set percentage of their monthly income rather than a set monetary amount, meaning neither of you will be left feeling short-changed at the end of the month.