NELA Living Blog by Emilie Broughton

Home Buying Tips for Unmarried Couples

According to the U.S. Census Bureau the number of unmarried partners living together nearly tripled in the past 20 years. There are some special financial and practical considerations for couples of all ages who want to buy a home together but have no interest in getting married.

  • How do you know if you and your partner are ready to buy a house?
  • Who should apply for the mortgage?
  • Who should hold the title to the house?
  • What if we break up?
  • What are the tax benefits?

Readiness:  How will repairs, taxes, and other home expenses be handled? Financial advisors recommend a joint bank account, dedicated to house expenses, such as repairs.

Mortgage-holder:  If the couple breaks up, this person will be solely responsible for the debt. Should this be the person with the highest income?  If the couple applies together, with both incomes and debts combined, the lowest of the two FICO scores will be used.

Title-holder:  Of more importance to buyers 65 and older, this can play a crucial role if one partner dies.  Tenants in common tends to be one of the most common forms of holding title, but if a deceased partner doesn’t name the surviving partner as the beneficiary of the dwelling, the survivor could be co-owner with the late partner’s relatives or heirs. 

Break-up:  Some options are a forced sale, or one partner can buy out the other.  A partnership agreement spelling our rights and obligations of each partner to the dwelling is recommended.

Tax benefits:  If one partner itemizes and claims the mortgage interest, property taxes, and all other allowable deductions, the other can take a standard deduction—this would maximize deductions over what a married couple can claim.

It is worth talking to a financial planner to resolve these issues when contemplating homeownership.

Estate planning is important and I would be happy to connect you with professionals to discuss a plan that works for your situation.

Based on ‘Couples say “We Do’ to owning homes.”  Wall Street Journal, November 4, 2020, p. B5.

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