Read This Before You Buy A House With Someone You're Not Married To

READ THIS BEFORE
YOU BUY A HOUSE
WITH SOMEONE
YOU'RE NOT
MARRIED TO
Article Source: www.huffpost.com
Image Source: https://artesiantitle.com/

H O W W I L L Y O U S P L I T C O S T S ?
One person may have the savings for a heftier
deposit. One may earn a higher regular salary and
find it easier to make mortgage payments. One
may be saddled with student debt or a low credit
score. One may be skilled with tools and ready to
do repairs around the house, raising the issue of
whether in-kind contributions have a monetary
value and what that value should be.
H O W D O Y O U H O L D T I T L E T O T H E P R O P E R T Y ?
Certainly, one person can hold the title alone. That
means the couple isn’t really buying the property
together ― one person owns it and the other is
essentially paying rent and probably shouldn’t be
expected to cover home repairs or taxes. Of course,
the couple can still buy furniture together, decorate
together and call the place home together.
Alternatively, two unrelated people can own a
house as joint tenants, where the full title to the
property automatically passes to the surviving
partner upon the other partner’s death. There isn’t
even a formal probate process.
Joint tenancy is a popular way to hold title among
married couples. Unmarried couples may or may
not be willing to pass that big an asset on to the
other person.

W H A T H A P P E N S I F Y O U S P L I T U P ?
What happens to the house in case of a breakup?
Address the issue of buying each other out and
how to resolve the matter if both of you want the
house. You may want a contract to automatically
give one of you the first right to buy out the other
at fair market value within 90 days. Or you may opt
for a coin toss to decide who gets to buy out the
other. (Yup, that can be legal if you agree to it.)
M O R T G A G E S D O N ’ T D I S A P P E A R W H E N L O V E D O E S .
One suggestion is to agree in advance that if the
relationship dissolves, the home will be refinanced,
removing the departing partner’s name. Decide
who pays any refinancing costs. What if the
mortgage can’t be refinanced because, say, the
original loan was granted based on two salaries
and the remaining partner’s income isn’t enough
to obtain a new loan? Perhaps then, you agree that
the house will be sold to a third party within a
fixed period of time. Spell it all out.

W H A T H A P P E N S I N R E A L L I F E ?
Purchases made by later-in-life unwed couples can
present especially complicated issues, said Murphy,
who advised Lees and Schwimmer. Their financial
affairs may differ significantly. “One will have more
money than the other,” the lawyer said. Plus, there
can be adult children, minor children,
grandchildren and sometimes elderly parents to be
considered.
“But any time two unmarried people of any age
want to buy property together, it’s imperative that
they plan for an infinite number of what-ifs,”
Murphy said. Without a legal document, there are
no rights or rules to protect them if they split, she
said.
J U S T G E T I T I N W R I T I N G .
Finally, don’t count on the idea of common-law
marriage to sort things out for you. There is a
mistaken belief that people who live together for
seven years are automatically married somehow.
Only 15 states and the District of Columbia
recognize common-law marriage by statute, and
even those states offer little uniformity in how real
property is divisible. On top of that, there’s this big
problem: You may have a common-law marriage,
but there is no such thing as a common-law
divorce.