For many couples, moving in together can be one of the biggest steps in a relationship. Sharing a living space together can come not too long before someone pops the big question.
But in the modern era, some couples are reversing this order of business. According to the US Census Bureau, the number of unmarried couples cohabiting has increased. It’s hard to know exactly how many of these couples actually own the property they live in, but it’s assumedly a trend on the rise.
Are you considering buying a property with your boyfriend and girlfriend? You might be indecisive on whether or not it’s a good idea.
Read on, and we’ll walk you through the potential upsides and downsides of buying a house with girlfriend or boyfriend.
Understanding Home Ownership
Many couples long for a space all their own. When you find that perfect neighborhood, floor plan, or location, it can be hard not to want to jump and sign the dotted line.
But before you do, it’s essential that you understand exactly what home ownership entails. In many ways, owning property is bigger and harder to break commitment than marriage. Failure to understand this can prove to create big problems later on in your life.
Before you buy a house, you’ll need to have a good amount of money set aside. You’ll need to put a down payment that is somewhere between 10 to 20 percent of the cost of your home.
You’ll then need to be approved for a mortgage. A mortgage is essentially a loan from the bank for the total price of your home. You can pay off this money to the bank in monthly installments. Mortgages are usually paid off over a period of time between 15 and 30 years.
As you can tell by those numbers, home ownership is a real long-term investment. It’s advisable that you feel strongly about the future of your relationship before committing to such a long-standing financial relationship.
Planning For The Future
Even if you do feel confident about the future of your relationship, it’s best to take a few precautionary steps just in case. These methods can help to ensure your financial well-being in the worst case scenario: the dissolution of your relationship.
Compare Credit Scores With One Another
Before moving forward with anything, it’s always a good idea to check in on your partner’s credit score. It’s important that you are able to separate the romantic side of your relationship with your partner from this transaction.
When it comes to buying a home, your girlfriend or boyfriend is now your business partner, and you need to view them as such. The creditworthiness of your significant other will determine what types of mortgages and loans you will be qualified to receive.
Married couples are viewed as a unit when it comes to applying, but unmarried couples are viewed at an individual level. That means your credit scores could affect who the title of the home goes to. This could help you get better rates but could leave one member of the relationship vulnerable if things were to go sour.
If you both have a great credit score, then there should be no issue. Regardless, you could consider opening a joint bank account in which you deposit funds to support home-related costs.
Create A Detailed Payment Plan
The most essential conversation you can have prior to purchasing property is how you and your loved one intend to pay for the home. The breakdown of this responsibility needs to be clear.
Have an honest conversation about how much debt you feel comfortable taking on, and how large of monthly payments you can handle. It’s a good idea to get this plan in writing with a real estate attorney.
Clearly outline your payment plan as well as the amount of equity on the home each partner is entitled to. This could be equal, or it could be tipped more towards one person if they’re taking on more of the mortgage per month.
The contract can and should go as far as to specify what would happen to the property if the relationship were to end. Will you both move out and sell the home? Will one member of the relationship stay and manage the full costs?
Even if you think there’s zero chance that a break up could happen, it’s best to have a plan in place just in case. Make sure to read more info on how a real estate attorney can help you safeguard your future plans.
No Need To Rush
Is getting a home with your unmarried partner a good idea? It completely depends on your particular situation. If you’ve been around the real estate block a few times and know how home ownership works, you might feel more comfortable taking the swing.
If you’re young and looking at your first house, it may be worth considering slowing down. There’s no rush to become a homeowner, especially in today’s environment. The more important thing is that you take the time to recognize if your girlfriend or boyfriend is the right long-term partner for you.
After all, there’s not too much of a difference between a mortgage and a diamond ring.
Buying House With Girlfriend or Boyfriend
It can be tempting to want to start the next phase of your life as soon as possible. Buying a house with a girlfriend or boyfriend can feel like exactly that: the beginning of an exciting new stage.
But there’s much to understand before taking the leap. Reading through the above info can make sure you’re properly prepared before signing on the dotted line.
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