How to Buy a House Together When You Aren’t Married (and Protect Yourself)
My boyfriend and I recently bought a home together. It is the first home either of us has bought and that in itself brings with it its challenges and excitement. Still, there was another piece to it that we also dealt with. Clearly, my boyfriend and I aren’t yet married (much to the chagrin of my mother) and although we are planning on getting married at some point, we wanted to make sure that if we weren’t to stay together for some reason that we had an agreement in place about what would happen with the home. Additionally, we knew that we were both going to be on the title and the loan and wanted to make sure we understood what that meant. Now as I’ve talked about before, my boyfriend is a financial planner. Since I routinely work in relationships and deal with marriage and divorce finances on a daily basis, we are probably more likely than most couples to have these difficult conversations. There were certainly some nights that we spent trying to figure out how this would work, and what it would look like. It wasn’t the most comfortable conversation at times, but I’m ultimately glad that we had the conversations and entered into a cohabitation agreement. It lays out exactly how we will manage the finances on the house for now and if in the unfortunate event that we don’t stay together.
First off, we had to discuss what the down payment on the home would look like because our financial situation is not the same at this point. While I have a good amount of student loans from law school, he was able to pay for school entirely on his own and has saved a fair amount since graduating. He’s also 4.5 years older than me so has had a head start there, but realistically we wouldn’t have been able to purchase the home without the majority of the down payment funds coming from him. Since we were not putting the same amount of money down, we had to figure out what that would mean if one of us later wanted to buy the other out. Also, we determined what would happen if one of us passed away and the other one wanted to be able to keep the property. We decided that we would look into and purchase life insurance to ensure that this was possible.
The other big thing we had to discuss for the cohabitation agreement is how we would cover expenses on the home, including the mortgage, HOA, property taxes, utilities, etc. While he’s had the chance to save more over the years, he recently made a career change, and our incomes are also not the same at this point. I make a fair amount more than he does. While the may change over time, at this point I’m covering a more significant percentage of the expenses for the home, and in reality, it’s only fair that I do. While I mentioned that we wouldn’t have been able to purchase the house without his down payment funds, we also wouldn’t have qualified for the mortgage that we did without my current income. We talked long and hard about what the division of expenses would be to make sure that both of us could afford to do this.
If you’re not married and thinking about purchasing a home together or even just living together, it can be helpful to have these conversations, a cohabitation agreement and a neutral third-party mediator may be helpful. There were a few times that we used my best friend to help us make sure that we both were understanding the other person.
Would you like to sit down and have a conversation about a cohabitation agreement? Contact the San Diego family mediators at SDFMC. Call (858) 736-2411 or more information today.