SINGLES . . . BUYING TOGETHER
One of the nation's fastest growing segment of
buyers are singles. By pooling their income (for qualifying purposes) and their
down payment cash with a friend, relative or significant other, singles are
packing up their apartments and moving into permanent addresses.
As the first generation to share property deeds but not marriage licenses,
single couples need to tread carefully through the purchase process. The key to
two unmarried people buying a house together is to resolve potential problems
in advance. In other words, plan for the worst case scenario even when the
relationship seems everlasting.
Many single couples resist creating what is much like a pre-nuptial
agreement. For those who are "committed" to each other, there appears
to be something inherently wrong with determining what will happen if you
separate. Never-the-less, it makes sense to consider how the property and/or
any existing equity will be divided should the couple break up in the future.
It is unlikely that both borrowers will invest equal amounts of money to
consummate the purchase. When there are disproportionate amounts of money
invested, it may make sense to determine in advance who will own the house
should a break-up occur.
Some of the questions to be answered include:
- how shall title be held?
- will the home be sold or can one person "buy out" the other?
- Should a sale occur, how will any equity be distributed . . . Equally, or in
proportion to their initial investment or?
- If the home is to be sold, who will remain as occupant during the sale?
- If one party moves out, how will the mortgage be paid . . . Will both parties
continue to contribute to the payment or will the occupant be responsible for
the entire mortgage payment?
Even under the best of circumstances, the borrowers will have to make
on-going decisions regarding expenses. There will be repairs to be made and
improvements to consider. Will these kinds of homeowner expenses be shared?
Will each partner contribute to a "home fund" from which all expenses
will be paid?
Obviously, there are many aspects of home ownership that must be considered
before proceeding to invest as unmarried co-borrowers. Thinking through the
process in advance will help avoid future disappointment and/or
Changes do occur even in the most committed relationships. Jobs change,
people become ill and sometimes people fall out of love. Arguments and bickering
do occur when couples break up. Buying a home together is a major investment.
Make decisions well in advance for a future that could include your worst
put your agreements in writing!
Web Page/Singles Buying Together