Three Home Buying Tips All Unmarried Couples Should Follow

The purchase of a home is a significant investment that should be well thought out. This is especially the case when it comes to buying a home with someone else, such as an unmarried couple. As an unmarried couple, you aren't always afforded the same legal protection as married couples in the event things go south. Before securing a mortgage with your partner, make sure you know how to protect yourself.

Create A Budget For One

When it comes to protecting yourself, start from the bottom with a solid budget. Not a budget that maps out affordability based on two incomes, but one that creates a path to affordability even if you need to rely solely on your income to maintain the home.

If your partners name is listed on the mortgage, sure they are responsible for the debt. However, unlike a married couple, should you two part ways, you won't have alimony to fall back on. If you fall behind on the mortgage, both of you will be affected. Try to look for a home that you can maintain on your own if necessary.

Ensure Loan Transfer Flexibility

Try to look for a mortgage that offers a loan transfer option. With some loans, you can't make any changes to the loan so if you and your partner sign a 30-year loan and break up, you two will be stuck together until this period expires.

If you secure a loan with transfer flexibility, you or your partner can follow steps to remove a name from the mortgage. This can come in handy in the event one of you decides to leave and maintain the home and the other person wants to walk away free and clear.

Secure A Joint Tenant Title

Make sure you understand that there is no one-size-fits-all title. The two most common options are a percentage based ownership title and a joint tenant title. With percentage based titles, you get to determine what level of ownership each party has, such as 60/40 or 70/30. With a joint tenant title, it's 50/50 down the middle.

For unmarried couples this is best because it ensures that both you and your partner have equal rights to the property which can prevent the other person from making any changes without your consent.

Don't think of these tips as a plan for the demise of your relationship, but instead a way to ensure you are fully protected. Life is full of the unexpected, but the better you are prepared, the less impact these changes will have on your future.