Should You Buy a Home With Someone You Aren’t Married To?

There are many perks of marriage, including more collective buying power, shared exposure to risk, and legal protection of your shared assets if and when you decide to split. This makes buying a house together, when married, a protected and reasonable decision. But if you’re buying a property with a significant other, to whom you aren’t married, the risks change, and things get more complicated.

To be sure, buying a property with a significant other does have its advantages. You can compensate for each other’s experiences and perspectives, ultimately coming to a smarter final decision, and together, you’ll be able to afford a higher down payment and higher monthly payments than either of you could alone. But do these advantages have the power to compensate for the inherent weaknesses of such an approach? Should you even consider buying property with a significant other?

Downsides and Risks

Let’s take a deeper look at the downsides and risks of buying property with a significant other.

• Loan responsibilities. First, there’s the burden of loan responsibilities. If you get a mortgage with your significant other (which you’ll probably need), you’ll likely be cosigning, and assuming mutual responsibility for the payment of that loan. If your partner is unable to fulfill their side of the financial commitment, you’ll be unable to pay that loan back, and you may eventually need to foreclose. That means, even though it’s not your fault specifically, you could pay the price for your partner’s inability to pay.

• Official ownership. The name(s) on the deed to your property doesn’t necessarily need to be the same name(s) on your mortgage. For example, if only one of you is assuming official responsibility for the mortgage, you could both be featured on the deed. This can be problematic in a few ways; if only one of you is featured on the deed and you break up, the other person will have no legal right to the house. If you’re both featured on the deed, it can force an even split of ownership—even if only one of you is paying for it.

• Legal protection when splitting assets. When married, you’ll have significant legal protection for splitting assets. That may not be the case when splitting with a significant other, which can lead to major headaches for both partners.

• Inheritance complications. If your significant other has children, splitting assets gets even more complicated. If you’re both on the title and both on the mortgage, you’re each considered to own half of the home. If your partner dies, their children will inherit their half of the house, which can be problematic if you don’t have a plan for how to handle that.

The Options

If you do buy a property with a significant other, you’ll have a multitude of options for how to proceed.

Whatever you decide, follow these vital tips for protection and success:

• Communicate proactively. Even though it might be difficult, you need to have an open and honest conversation about the financial and legal aspects of buying a home together. Who will be responsible for what? What are you going to do if one of you dies prematurely? What will you do if you break up? These aren’t fun topics to discuss, but you’ll need to cover them so you can work out your differences in advance and come up with a solid game plan.

• Avoid unnecessary exposure to risk. Whenever possible, try to minimize your potential exposure to risk. If you can avoid cosigning the mortgage, do so. If you can make a smaller financial commitment by buying a smaller house, do so. Even though you see yourself as a couple, it’s still a good (and mutually beneficial) idea to maximize your individual interests. That means forgoing unnecessary risks.

• Get everything in writing. Before entering into a marriage, you can use a premarital agreement to define exactly how you’d like to split assets in event of a divorce. You can attempt something similar by drafting a legal agreement between you and your significant other for how you’re going to treat the house (and the mortgage, if applicable) if you break up, if one of you dies, or if something else disrupts your original plan.

The bottom line here is that it’s perfectly acceptable, and in some cases, advantageous, to buy property with a significant other—so long as you understand the risks involved, and communicate proactively about how you’re going to handle the purchase. The more open and honest you are, and the more collaboratively you work, the smoother the process will go—and it can work out in you and your partner’s favor, even if you end up apart.