Homebuying Advice For Cohabiting Couples
It is getting more common these days for unmarried millennial couples to buy a home together before tying the knot. Both men and women have become more accustomed to the idea of staying together before getting married and majority of them sees it as a crucial step in preventing divorce in the future. If you are considering to buy a home with your partner, continue reading to learn about some homebuying advice for cohabiting couples.
Why Unmarried Couples Buy Homes
Couples today are getting married much later in life as compared to previous generations. However, they may want to own a home before tying the knot for a series of reasons as follows:
- If they have successfully lived together in a rented unit, it seems logical for them to upgrade to ownership once the current lease is up.
- The recent global crisis has increased the desire in people to secure their own place where they can easily work remotely.
- Mortgage rates have plunged significantly for years which make home ownership much more affordable.
- In much more expensive neighborhoods, it requires two incomes to buy a home.
- At least 38% of millennials thinks that spending money on a down payment is much more worthwhile than spending on an expensive wedding.
Risks of Buying a Home with a Partner
Buying a house is a huge commitment regardless of your marital status. It poses risks to your social, financial, and legal situations whenever you decide to buy a house with someone whom you do not have a long-term commitment with. Living together in a rented place is nothing like living together in a bought house. The latter involves greater responsibilities and more expenses which may inflict a strain onto your relationship if no proper management is put in place.
Knowing Your Partner’s Finances
Find out more about your partner’s finances especially regarding their debts and spending habits. This way, you can work out together whether or not both of you can afford to buy a house together.
How to Hold Title
There is a total of three ways that house titles can be held. One person can hold the legal ownership of the house or both partners can choose to own it. In a joint ownership, both owners will be regarded as joint tenants with survivorship rights. This means that both owners can share equal ownership and when either one passes, the other becomes the sole owner. As for tenancy in common, it is suitable for those who want to have unequal shares of the property. This means that the house will not automatically transfer to the surviving owner when the other passes.
Create a Cohabitation Agreement
If you are certain of buying a house together even before getting married, seek proper legal advice. Each one of you needs to consult a lawyer on separate occasions to document the financing and ownership details and whether a cohabitation agreement is really needed.
All of these considerations come with a mutual agreement from both parties who should already be earning a certain level of steady income before moving on to the next step.