Are You Brave Enough To Buy A Home While Engaged?

Karin Carr, Owner
Published on December 5, 2018

Whoever coined the phrase “Bridezilla” must’ve been referring to the bride (or groom) who was juggling wedding planning with homebuying.

Believe it or not, many couples avoid the chicken and egg scenario (what comes first, the wedding or the house?) and decide to do both processes simultaneously.

It sounds crazy, but if you have a system and some professional guidance,  you can be successful.

Read on for our tips to get you from chaos to homeowning spouses.

It all comes down to money matters

Since the first step in a home purchase is getting a loan, you’ll need to decide if you should both apply or just one of you.

If you go for the joint mortgage, the lender will combine both applicants’ income, assets, and debts. If one of you has a lot of debt, it will weigh down the application.

If, on the other hand, you’re like the average couple, where one of you looks better on paper than the other, perhaps that one should apply for the loan.

In many cases, one-half of the couple has good credit but a lower income than the other. The lower income limits the amount of loan you’ll qualify for, while the high credit score may help you get a better mortgage rate.

You may want to sit down with your financial professional for the best advice on how to approach the mortgage application process.

Are You Brave Enough To Buy A Home While Engaged?

You must consider the unthinkable

Although it may be unthinkable right now, there is a chance that you may not make it down the aisle. If you don’t, you will be among the nation’s 25 percent of failed engagements (according to Time magazine).

So, even though it’s unthinkable, you should be prepared for it, just in case. The best way to do this is to meet with an attorney about how you should divide the property, should a breakup occur. This is especially important if only one of you is on the home’s title.

To be extra safe, have your lawyer prepare a written agreement that both of you can sign.

While it’s not nearly as romantic as planning a honeymoon, planning for the successful purchase of a home before you tie the knot is important.

Other factors to consider when purchasing a home when unmarried

The first is taxes. Due to the fact that you file your taxes individually, only one of you will be eligible to benefit from tax deductions such as the deduction for interest paid on a mortgage. Make sure you have a strategy in place to deal with this situation so that you don’t end up fighting at the end of the year over who gets to save money on their tax bill.

Another thing to think about is how you might strengthen your relationship despite the challenges presented by the situation. You probably already have a good understanding of the other person’s financial situation if you are buying a home with them. However, in order to obtain a mortgage, you will need to do an in-depth investigation of both your credit and financial situations.

The Bottomline

The purchase of a new house may be an exciting time in anyone’s life. Be aware that the circumstance may get more difficult if you choose to make a purchase with a partner to whom you are not married. Even though nobody wants to think about it, breakups are inevitable, and preparing for one in advance can make a terrible situation a little easier to manage. Planning ahead can help ease the agony of an already difficult circumstance.

Feel free to reach out to us with any questions you may have. We love to talk about real estate!

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