You don’t need a ring to get a mortgage. More and more, unmarried couples and friends are buying homes together. It’s a great way to pursue the American dream without having to worry that you haven’t found the perfect spouse yet. You don’t have to be married to buy a home with someone, but that doesn’t mean you’re not supposed to exercise the same amount of caution that any home buyer should. Unmarried homebuyers should also be aware of common issues unique to their situations.
Cliffco Helps All Types of Customers Get Home Loans
At Cliffco Mortgage Bankers, we help all sorts of customers achieve their dream of home ownership. So we want to to tell you what you need to know about buying a home with a partner who isn’t your spouse and what steps you can take to protect the rights of all parties in the deal.
Unmarried homeownership is on the rise. According to Marketwatch, the number of young unmarried couples, defined as people between the ages of 24 and 35, who are buying homes together has risen from 11 percent in 2005 to 15 percent in 2015. That represents a 36 percent boost in sales to young unmarried couples in a decade.
While some say that this trend comes as a result of changing social norms, economic factors may have also played a role. “Being able to afford that monthly mortgage payment has grown out of reach for many single buyers,” Aaron Terrazas, a senior economist at Zillow told CNBC.
Issues for Unmarried Home Buyers
But there are issues that need to be ironed out before you close on a purchase. Time.com suggests buyers share details about their credit score. It’s also good to know details about each other’s income and savings. If one of the partners has a poor credit score, that could influence who takes title to the home and who takes responsibility for loans.
Title is an important issue and you have to decide what you want. One person can hold title as sole owner, both partners can hold title as “joint tenants,” or can share title as “tenants in common.” Usually both parties have title if you sign on as tenants in common, and each owns a specified percentage of the property, say a 60-40 or 70-30 partnership. If you hold a joint tenancy with a right of survivorship, you’re equal partners and if one of you dies, the other partner will hold the title.
If you co-sign the mortgage you’re completely responsible for the debt which means you’re on the hook if the relationship sours. Many recommend non-married partners buy a home that is affordable to someone with access to fly one income.
Finally, it’s a good idea to put your agreement in writing, and an even better idea to have a lawyer with knowledge of real estate law prepare the agreement. It should outline who pays for what and whose name is on the deed.
Let Cliffco Mortgage Bankers Explain Your Options
A little common sense and good planning can make any type of real estate transaction run smoothly and Cliffco Mortgage Bankers can help explain the types of loans that may be available to you. For more information, contact Cliffco today.