They say love is blind, but in a real estate purchase, you need to have your eyes wide open, especially when buying jointly while not married. Today, many couples who are not married choose to show their commitment to one another by investing in a big asset such as a house.
Moving in together
Many of the young couples today start living together before they get married, and others believe that purchasing a house should happen before anything else. Some of the things that attract couples to make a purchase include:
- Low rates of mortgages
- Rental cost rise
- Capacity to deduct mortgage interest from the income taxes
These are the things that make buying a house with a partner before getting married such a great option for some.
What financial planners think
Most financial planners are against this kind of investment because getting a home is a very big decision and a very financially complicated move for any couple to make. Unwinding such a move can be very hard, especially for the unmarried couple if their relationship doesn’t lead to marriage and they end it. There are some tips that can help you protect yourself from financial heartbreak.
Credit scores need to be compared carefully. You may have shared the intimate details of your savings and your income when you are thinking of whether to buy. Your credit report needs to be shared as well. This is a business deal that you are about to enter into, and it is important to know each other’s credit worthiness. The credit score impacts the ability of a person to get a mortgage as well as the rate of interest that will be paid. Unmarried couples have to be assessed individually, while married couples are taken as a unit.
Joint account when not married
The unmarried couple also has to set up a bank account jointly. This is the account that will be used in paying for the maintenance, insurance, property taxes and mortgage. You can then decide on the monthly deposits to make from your own accounts automatically. This helps you not to forget your responsibility.
You also have to decide exactly how the costs will be managed. You will be liable for a debt and if the partner stops paying should the relationship become sour, the entire obligation will be assumed by you. You should therefore choose a mortgage that you can easily manage with only a single income. This can help if you suffer unexpected injury or illness as well.
The agreement needs to be in writing. You need to get in touch with a lawyer to have the written document prepared. This is a cohabitation, partnership or property agreement that will outline all the details of the agreement that you will be making and the home equity that every partner has an entitlement to.
All these things can help with your purchase.