If you and your long-time romantic partner are ready to buy a home together but not to get married, you need to take some precautions to protect your investment that a married couple wouldn’t. The same is true if you’re buying a home with a family member (who isn’t your spouse).
As one real estate professional notes, it’s becoming more common “for multiple generations of a family to purchase a single-family home due to the convenience of what that home can offer.” This may be babysitting by a grandparent while the children are young and then elder care as that grandparent ages.
Be sure that your potential co-owner is responsible
You don’t want to purchase a home with just anyone – no matter how close you may be with them. Unless you’re paying cash, you want someone whose income and credit will help you get a mortgage at a good interest rate.
You also want to be sure you can count on the co-owner to contribute their fair share to the mortgage, property taxes, insurance, homeowners’ association (HOA) dues as well as the ongoing costs of maintenance, repairs and upgrades.
The importance of legal agreements
Legal professionals often recommend that any two (or more) people who aren’t married to one another who buy a home together put a cohabitation agreement and a property agreement in place. One person who teaches real estate explains, “The former will usually define the disposal of the home in the event of a breakup or death of one party and also describe each person’s financial obligation to the home. The latter should list in detail any appliances, furniture, and other personal property articles brought into the joint household, and those amassed during your period of living together, and indicate how this property will be apportioned and handled if one or both parties decide to move out.”
Of course, each situation is unique. However, it’s important to remember that this is a large and likely long-term financial and real estate partnership. By having clear, valid legal agreements in place (and having separate legal representation), you can minimize the chances of costly, time-consuming conflict down the line.