What to know when buying a home with your significant other

For some couples, homeownership happens before marriage. What’s involved? Our checklist provides a complete rundown for you and your significant other.  

Tags: Mortgage, Home, Home buying, Loans
Published: April 11, 2018
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What to know when buying a home with your significant other

For some couples, homeownership happens before marriage. What’s involved? Our checklist provides a complete rundown for you and your significant other.

Home buying jitters? That’s natural before any major commitment. When buying a home with your significant other, there is also slightly more risk than if you’re mar-ried. However, if you and your partner can make an informed decision on titling and write a contract together, you both might be able to manage this risk.  

 First-time home buyer tips for unmarried couples

Strange as it sounds, if you’re not married, banks treat you and your significant other like joint partners in a business deal. This is a key difference for unmarried couples. If you understand this, you can protect yourself against adverse circumstances.

This checklist will help you and your partner focus on the important financial aspects of your first-time home purchase. 

As you get started

Review your finances

Look at your bank accounts as well as brokerage and mutual fund accounts. Then, consider any debt you have. Develop a plan to make the purchase both fair and realistic for both of you.

Compare credit scores

You may get a better mortgage rate if only the person with the (substantially) better credit score applies. Talk to your mortgage banker if you have any questions. 

Save for a down payment

Often this is 20 percent of the total cost of the home, but not all loans require that much down.

Agree on a final price and total budget

A mortgage calculator can tell the monthly payments needed for different priced homes. When looking at homes, also consider: can you afford updates if needed? 

Make sure you’re aligned on location, style and size

You can always repaint the kitchen, but you can’t change how far you are from family and friends.

Decide on a mortgage plan

While you may get a better rate if only the person with better credit applies, you’ll be more likely to secure a larger loan amount if you both apply (assuming you’re both regularly employed). 

Get prequalified for a mortgage 

Prequalification from a lender will tell you the maximum mortgage you qualify for.

Before closing on your home

Budget for closing costs

Originating a mortgage and transferring ownership can cost   in the thousands. This may include origination charges, title transfer taxes, title insurance fees and inspection fees.

Decide on titling

“Sole ownership” on the title means only one of you owns the home; “joint tenancy” means you own the home equally and if one of you dies, it passes to the other; “tenants in common” lets you specify the share of the home each owns — and who gets it upon passing. 

Draw up a legal contract 

The future is unknowable, but a legally binding plan can save   you both future headaches.

As you’re moving in

Plan for upgrades and new furniture 

Having contractors in your home will be less stressful before you’ve actually moved in; talk through the upgrades and any major furniture purchases you’ll need for your new digs.  

Open a joint bank account

This is one of the easiest ways to share expenses and to save together. Consider auto deposits so saving becomes second nature. 


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