The Do's and Don'ts of Buying a Home When You're Not Married

So, you’ve met someone, fell in love and now you’re ready for the next step… buying a home, of course! This is the route that some couples are choosing today, swapping an engagement ring for a key ring! In ways, buying a home actually is similar to getting married. After all, you’re making a major commitment that should not be entered into lightly.

In fact, if you and a partner decide to purchase a home together, it is important to follow a few guidelines, so that each party is protected no matter what becomes of the relationship.

 Here are 10 do’s and don’ts for buying a home when you’re not married:

1. Do understand that it is a total team effort.

When you and your partner are meeting with your real estate agent and touring through available homes, it is easy to feel like you’re on the same team. But, when you’re about to make one of the largest purchases in your life, you’ve got to maintain that teamwork throughout the entire home-buying process. That means you’ve got to do everything together - have tough financial talks, build your credit scores and save money!

2. Do decide whose name will be on the title.

Well, we just mentioned that this was a total team effort, so you may be assuming that both partners will be listed on the title. However, that actually is another team decision. If both partners are listed on the title, both have the opportunity to earn equity. Similarly, if the relationship comes to an end, both parties may still be held accountable for the mortgage. Instead, couples may decide to list only name on the title, but come to another agreement on who owns what portion of the home.

3. Don’t be afraid to make it legal.

Speaking of another agreement regarding home ownership, it is a good idea to make it a legal one. When you’re talking about a serious purchase like buying a home together, you cannot be afraid to also talk about some legal issues, like exactly who should pay for what portion of the mortgage, taxes, future home repairs and any other homeownership costs.

4. Do prepare to be judged.

No, we’re not talking about your traditional relatives who may want you to tie the knot before buying a home together. However, you may feel like your lender is one of them! Even if you and your partner already have had thorough financial talks together, your bank may bring them up again. Lenders are sure to look at each partner’s financial history and standing individually, even if the loan is to be in both names.

5. Do set up a joint bank account.

Remember that advice about saving money together? When purchasing a home with a partner that you’re not married to, it is a good idea to establish a joint bank account where each partner can make regular contributions. This way, there will be no confusion about who is putting up mortgage, taxes, insurance and repair money.

6. Don’t borrow at the high end of your budget.

OK, when you pass the home mortgage hurdle and gain preapproval with your partner, don’t just start browsing homes at the top of your budget. Exercise some caution and make sure that both parties are more than comfortable with your estimated mortgage payment. In fact, it may not be a bad idea to select a home that could be covered with only one income.

7. Do consider what happens if you break up.

As if the “only one income” line wasn’t foreshadowing enough, when you’re buying a home with a partner that you’re not married to, you’ve got to think about what may happen if you break up. Will one party remain with the house and the mortgage? Will you sell and split any assets? Will you continue to co-own the home and rent it? They are probably not thoughts you want to have when you’re looking to buy a new home with a partner, but they are important things to consider.

8. Don’t forget to have a contingency plan.

Wait, isn’t that what we just talked about? Nope, this is another not-so-fun topic you may need to discuss with your partner before you buy a home as an unmarried couple. What happens if one party is unable to continue making payments on the home? Will both parties be forced to move out or could one party takeover the payments? Talk it through before you commit to a long-term mortgage.

9. Do consider what happens if you sell the home.

Here, we’re not even talking about a potential break-up. There may come a time when you and your partner want to upsize, downsize or relocate. How will you share the expenses and proceeds that may come along with your home sale?

10. Don’t rush!

Obviously, there are a lot of things to consider when it comes to buying a home and this is particularly true when you’re buying a home with someone you are not married to. Talk everything over and don’t rush into buying a home until you both feel that you’re ready.