Today we are excited to have Mark Scheets return as our guest blogger. Mark is a writer forTotal Mortgage Services, and often writes about home buying and refinancing.Throughout the home buying
process there can be various hurdles to jump over to make sure
everything goes smoothly. In todayâs culture, we are finding more often
unmarried couples are purchasing their first homes together. Although
this sounds like a great plan, there are precautions that need to be
taken in order to make sure the process is done right. Doing your
research beforehand can alleviate any headaches. From a financial sense
it is more difficult to break the co-ownership of a house, than it is to
get a divorce, if things turn sour.
When making the decision to purchase a home with your significant
other, you and partner must know that just like with marriage, a
property agreement is a legal contract. One of the more important
aspects of purchasing a home together is knowing how the investment will
be split. In many cases, one partner may initially invest more money
into the home than the other. This may cause issues in the future if
things donât work out due to the fact that legally one person may end up
owning more of the house than the other.
If the relationship were to end, a dividing of the assets needs to
take place. Although everyone in a relationship hopes for the best,
preparing for the worst-case scenario will alleviate any hassle in the
future. The best way to protect yourself is to come to an agreement as
soon as possible while you both are still happy. If there were to be
any future issues, it could get real ugly resolving things if steps were
not taken care of from the start.
As an unmarried couple looking to purchase a home together, there are
a few concerns you need to be aware of. When the time comes to apply
for a mortgage, the lender needs to run both of your credit scores.
This can backfire if one of you has a great credit score and one has a
terrible score. If this is the case, then you may not get the loan.
You will also want to check your individual stateâs laws regarding an
unmarried couple purchasing a home together, as some states donât allow
it. You as the homebuyer need to know this because if you are planning
on going through with the purchase and canât legally, you will be
Having the right paperwork filed is another important step to take,
because without it you could find yourself in trouble in the future.
One thing to do early in the home buying process is to file for a Joint
Tenancy With Rights Of Survivorship (JTWROS). A JTWROS allows for the
home and assets to be passed to the surviving partner if the other were
to pass away. This lets the partner avoid inheritance taxes, as the
home wonât go through an estate. Married couples are automatically
granted JTWROS whereas unmarried couples are not. By doing this you can
save yourself a great deal of potential stress in the future.
If you had filed for JTWROS with your partner and something went
wrong with the relationship, you would need to fix your agreement. If
you donât adjust past agreements, then your soon to be ex is still
entitled to the house and potentially your assets if you were to die. On
paper if you had left everything all to your partner but intended to
change that and never did, they are still legally getting everything.
This also goes for if one partner were to pass away and if you didnât
file for JTWROS, the family of the deceased partner may try to sell the
house. If the partner had made a will to leave everything to their
family, it would not matter if the surviving partner wished to remain in
What to Adjust After Getting Married
If down the line you and your partner decide to get married, there
will be more papers that would need to be altered. The biggest
adjustment would need to be the title to the house. After the title is
adjusted, creditors cannot single out one of you for bad credit. This
is good due to the fact that they cannot add extra interest to that
partners share. If you and your soon to be married partner both have
good credit, this can work out great if you were looking to refinance
once everything is fixed.
As stated, there are precautions that need to be taken when
purchasing a home as an unmarried couple. As we all know, getting
married is one of the biggest decisions we will make. Planning to buy a
home together is a great decision as long as you are cautious about how
you go about it.
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