Buying a Home Before Marriage
Many couples nowadays don’t wait until marriage before moving in together and buying a home. However, if you are thinking about making this decision, there are a few things you need to consider in addition to the type of home you want. Here is what you should consider before buying a home before marriage.
Your credit score and the score of your partner is one of the most important factors when getting a mortgage. Higher credit scores typically lend themselves to a better mortgage rate. Unmarried couples have the option of using their credit scores separately if necessary. If you decide to do this, you have the option of having only the person with the better score apply for the loan. However, in this case, only that partner’s income will be considered for the loan. That single income will need to be enough to pay the mortgage.
Before purchasing a home, discuss any and all information about financial obligations with your partner, including your credit score, debt, and income. This information will be required when getting a mortgage, so it’s best to brief each other about your situation. You should also be aware of any debt obligations. Should you and your partner split, and they not pay their share of the mortgage, you’ll be the one responsible. For that reason, many financial planners advise that the mortgage cost more than one person’s salary.
In addition to your current finances, you’ll want to discuss how finances will work after the purchase of the home. Draft an agreement that states who will pay for what and how much. This should include the down payment, mortgage payments, fees, any upgrades to the home, and any maintenance that needs to be done.
In the event of a breakup
While it might not be fun to think about, there is a possibility that the relationship will not work out. What will happen if you and your partner break up? Who will keep the house? Will you sell it? How will the purchase price be determined? Once it sells, how will you split up any profits received? These are just a few of the many questions that you should answer before purchasing a home.