What to Expect When Purchasing a Home as an Unmarried Couple

Ah, Millennials – this generation is no stranger to doing things a little differently than their predecessors. Take marriage, for example.

Urban Institute released a report that found most Millennials will remain unmarried through age 40, and the marriage rate is predicted to drop to 70%.

What does this mean for homeownership?

If you are in a committed relationship and want to buy a home – you do not need to be married to purchase one. While it might be a little trickier in terms of selecting the best title plan for you, it is possible.

You just have to plan the “what ifs” – in this case, if you break up.

No couple likes to discuss breaking up, but it’s important that you discuss an unfortunate scenario like this one if you and your partner plan to purchase a home without being married. This can save you from stressful and unnecessary situations regarding property rights and financial burdens.

How to Prepare

Think about signing a prenup for the home. Create a co-ownership contract with the help of a legal professional before closing day.

This document should cover questions like:

  • What happens to the property if you split?
  • What happens if one partner can no longer pay the mortgage due to outside financial trouble?
  • Who pays for utility bills or for major repairs?
  • What happens if a partner becomes disabled or dies?

While a prenup isn’t required, it can help prepare for any unforeseen circumstances in the future that would be covered if you were married.

Selecting the Right Type of Title

When you’ve found the home you both want, it’s important to consider which title best fits for your relationship. Options will vary from state to state, but generally include:

  • Sole Ownership
    • Only one name is recorded on the deed. This person has all the rights and responsibilities of ownership.
    • This might be a good option if one partner has bad credit, but if your relationship ends, one person will risk walking away with nothing, even if said person contributed money to the home.
  • Joint Tenancy
    • Each person owns 50% of the property. If a tenant dies, their share automatically moves to the other joint tenant.
  • Tenants in Common
    • This allows for a distribution of ownership – for example, one could own 75%, while the other owns 25%
    • This might be the best option in order to tailor to fit your specific financial contributions. If one person can put more money into the down payment, that person can then own a larger share of the home.

If you’re one of the many Millennials who are delaying marriage (or might not ever marry), but plan on buying a home with your significant other, it’s important to discuss all options to find the best plan for you.

*This information is not legal advice. Alliance Title & Escrow Corp. assumes no responsibility or liability for reliance upon the information contained herein.

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