HOW TO BUY A HOUSE TOGETHER

The only symbol that comes close to the wedding ring as a signal of your love and commitment is your mortgage. We know a couple who jokingly say that while not yet married, they are “in mortgage” to explain the status of their relationship.

Before gay marriage was legalized, buying property together as a male same-sex couple, was a tricky process. Thankfully, those legal and financial gymnastics are a thing of the past. We can all put ourselves in debt for 30 years, easy breezy!

But, for those gents who aren’t yet Mr. and Mr., but are ready to take the home-owners plunge, there are two steps that both your lawyers and your financial advisers will endorse.

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1- Sign a pre-nup

While there is no future planning paradox more confounding than planning for the end of your relationship before even making it official, when it comes to buying a house outside of marriage, a co-owner contract or “house pre-nup” is the way to go.

With the help of a real estate lawyer, ask and answer questions such as: What happens to the property if you split? What if one of you becomes disabled or dies? Who pays utility bills or for major repairs? How will you resolve disagreements like deciding to refinance (or not) or if one of you wants to take a home equity loan?

The more you forecast what challenges you’ll have around owning a home together—and how you will address those challenges—the happier your home will be.

Now, as soon as you tie the knot, your co-ownership contract will be a thing of the past. But, it will never hurt to already be very clear about how you’ll be “in mortgage” and marriage, with each other.

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2- Choose the right type of title

There is more than one way to own a house, and taking title to your dream home together the right way is especially important for unmarried couples. Options vary from state to state but generally include:

Sole Ownership:

This is pretty straightforward. The title of your house is in one person’s name, conferring on that person all rights and responsibilities to the house.

You might pursue this option if one of you has bad credit or if you have meaningfully different income levels. And, were you to split up, your “house pre-nup” will spell out how you’d sell the house and/or distribute any equity you’ve built in it.

Tenants in Common:

This arrangement serves couples who aren’t looking to, or aren’t able to, own the house 50/50.

The upside to this arrangement is that you can reflect who is investing what (from down payment to monthly mortgage payments) and clarify how to distribute the upside on the house should you decide to sell. One item to resolve in your co-ownership contract is who owns the house should one in the couple pass away. Tenants in common arrangements do not automatically confer ownership in death to the surviving partner, so make sure this is stated both in your co-ownership contract and in a will.

Joint Tenancy:

This is when you own the house equally, 50/50.

Unlike the above, joint tenancy does confer ownership to a surviving partner without any further legal specification. However, where it might get tricky is were you to split up and one doesn’t want, or is unable, to buy the other out.

Again, the moment you say “I do,” all of the above is moot. But, until you do say “I do,” it is always best to know what you will do when it comes to buying and selling a house together.