Buying a property together is a significant step for unmarried couples. This decision involves unique legal considerations and requires careful planning. There are plenty of critical property laws pertaining to unmarried individuals owning properties, including title considerations, and protective measures for individual investments.

It's crucial to understand the nuisances of a purchase together when you haven’t tied the knot. There are many essential considerations when buying a home before being married. For many unmarried couples, purchasing a home together is a romantic and practical decision.

However, without the legal protections marriage affords, it’s crucial to understand the legalities that govern such purchases. These tips will offer added protection to both parties provide additional information they may need to make an informed decision.

Title considerations

The first crucial aspect is how to take title to the property. You may want to speak to a local real estate attorney before deciding. They can advise based on state laws.

Joint tenancy vs. tenancy in common

Unmarried couples typically hold title in one of two ways: joint or tenancy in common.

• Joint tenancy: This arrangement allows both parties equal ownership and rights to the property, if held as joint tenancy with the right of survivorship. This means if one partner dies, the other automatically inherits their share. This bypasses the probate process, which can be lengthy and costly.
• Tenancy in common: Each party can own a different percentage of the property and will give their share to someone else upon death.

Choosing the right title arrangement

Deciding how to hold a title depends on each couple’s needs and plans. Couples should consider factors like the contribution to the purchase price and future financial goals. You can get personalized advice by finding and consulting with a real estate attorney. They can also help draft agreements that reflect each party’s intentions.

Mortgage qualifications

Having an upfront discussion about how the finances will work before looking at homes is strongly suggested. Disagreements can occur at inopportune times when proper planning is not done.

Assessing joint mortgage eligibility

Unmarried couples must qualify for a mortgage together to buy a home jointly. Lenders will consider both partners’ credit scores, incomes, and debt-to-income ratios.

• Credit scores: Both scores are considered and the lower score can affect the loan terms and interest rates offered.
• Income verification: Combined income will determine how much the couple can borrow.
• Debt-to-income ratio: This ratio is crucial as it indicates how much debt the couple carries compared to their income, affecting their borrowing capacity.

Navigating the application process

Applying for a mortgage together when you’re not married can be complex. It’s advisable to be transparent with lenders about marital status as it can affect their underwriting requirements. Documentation such as proof of income, employment and identity will be required.

Protecting individual investments

It is advised that anyone purchasing a property with someone they are not married to consult with an attorney who can advise them as to what documents may be necessary to protect their legal interests.

Research and due diligence

Before purchasing, couples should thoroughly research the property and local real estate laws. Unmarried couples purchasing a house should consult with a real estate attorney to help uncover any legal issues with the property and provide guidance on the buying process.

In conclusion, unmarried couples can face unique challenges when buying property together. Understanding the differences between joint and tenancy in common, knowing how to qualify for a mortgage and implementing protective legal measures are essential steps. Buying a home is a significant commitment. Unmarried couples should approach this decision with careful planning and consideration. Legal advice from a licensed attorney is invaluable in this process, helping to ensure that both partners are protected regardless of future changes in the relationship.

*Adapted from an article published by RISMedia

This material is meant for general illustration and/or informational purposes only. Although the information has been gathered from sources believed to be reliable, no representation is made as to its accuracy. This material is not intended to be construed as legal, tax or investment advice. You are encouraged to consult your legal, tax or investment professional for specific advice.