Making the Leap: Tips for Buying a Home While Unmarried

Buying a house is a significant investment, and it can be a daunting experience, especially when you are doing it as an unmarried person. However, it doesn’t have to be a scary process if you prepare well and know what to expect. Here are some important things to consider when buying a house while unmarried:

Determine your budget: One of the first things you need to do is determine your budget. Knowing how much you can afford to spend on a home will help you narrow down your options and avoid any potential financial issues down the road. Consider all of your expenses, including mortgage payments, property taxes, insurance, utilities, and maintenance costs.

           A) Talk openly about your Finances:Since you’re entering into a joint financial commitment, now is the time to talk about each partner’s income, credit score and debt obligations (including student loans, credit card debt, and car loans). Before anything else, you must make sure that you can both afford a home purchase right now.

Create a Cohabitation agreement: You’ll also want to draft a cohabitation agreement that spells out key details about your arrangement, including who pays for what and what happens to the house if you split up. “Having a written cohabitation agreement that outlines how the property will be divided can help avoid potential disputes in the future,” says Erin Kemp, a consumer advocate at Ownerly.

Get pre-approved for a mortgage: Getting pre-approved for a mortgage is an essential step in the home-buying process. It will give you an idea of how much you can borrow and help you determine a realistic price range for your house hunt. It will also show sellers that you are a serious buyer and improve your negotiating power.

          A)Consider your mortgage strategy: If one partner has bad credit, it could hurt your chances of qualifying for a mortgage as a couple, or getting a competitive interest rate from a lender. (Even if the other partner’s credit is stellar.) In these cases, it may make more sense for the person with better credit to apply for the mortgage alone. However, having just one person on the mortgage puts all of the legal burden on their shoulders when it comes to repaying the loan, so this is a decision that shouldn’t be made lightly.

Determine the right ownership structure: Relatedly, it’s not your mortgage that determines legal ownership of the property — it’s your house title. As an unmarried couple, there are several ways to title your home. One of the most common methods for couples is joint tenancy, which gives each party 50-50 ownership rights. Other common title options include tenancy in common (where each party owns a certain percentage of the home) or tenancy by entirety (where both parties have full ownership).

Hire the right real estate attorney: Buying a house as an unmarried couple can create some complicated scenarios that single and married homebuyers don’t face. Protect yourself and your partner by working with an experienced real estate attorney, who can explain the legal and financial implications of your purchase, draft your cohabitation agreement and outline the pros and cons of various ownership structures.

Consider your future plans: When you are buying a house as an unmarried person, it is essential to consider your future plans. Are you planning to get married and have children? Will you be living alone, or do you plan to have roommates or rent out a portion of your home? These factors can affect the type of home you buy and its location.

Protect your investment: Finally, it is crucial to protect your investment. Consider purchasing homeowners’ insurance, which will provide coverage for any damage or loss to your home. You should also consider creating a will, especially if you plan to leave the property to someone specific in the event of your passing.

Buying a home as an unmarried person can be an exciting and rewarding experience. By following these five steps, you can ensure that you make a wise investment that meets your needs and provides a stable foundation for your future.

If you are ready to take that next step, Let’s talk today!!