5 May 2011
Of course, it depends on the situation, but usually a couple may be able to make a larger down payment – this will let them qualify for a better mortgage.
Who should get a mortgage?
In some cases a couple may decide to base a mortgage application on one income. It can be a good idea in case one partner has bad credit history or becomes ill or unemployed. But still the bank may require both homebuyers to be on the mortgage. Moreover, it can be a certain kind of security guarantee, because both partners will be equally responsible for the loan.
Who should be named in the title?
The title names a legal owner of the house and shows how it’s transferred in case of death. Unmarried couples should make this distinction in order to protect their own rights. Generally, they are named joint tenants or tenants in common. If only one partner is named in the title, the other one has little rights in case of the owner’s death. And again: before making any decision, please, consult your lawyer about real estate and family law implications.
What should be included into home buying partnership agreement?
For an unmarried couple it’s highly recommended to include all financial agreements into a written document. Here you may ask a qualified real estate lawyer to write a home buying partnership agreement, which will explain how all financial questions will be handled: down payment, monthly mortgage payments, repairs etc.
This agreement should clarify what happens if the couple decides to split. For example, who will keep the house, how to determine the price for the home, who will be responsible for the sale, and what to do if the home won’t be sold for a long period of time.