Home prices in many parts of Arizona and across the country are out of reach for many Americans. Even being able to qualify for a mortgage with a decent interest rate may be out of the question, especially if you have student loan debt and other financial obligations.
Two incomes are often necessary to get a mortgage and afford all the expenses that come with home ownership. That is why people who do not plan on getting married any time soon (or maybe ever) may consider buying a home jointly with a long-time romantic partner.
One real estate professional notes that it is also becoming more common for “multiple generations of a family to purchase a single-family home….” A widowed parent, for example, might buy a home with their divorced adult child.
Be careful when agreeing to co-ownership
Whether you are buying a home with a romantic partner or a relative, it is crucial to protect your interests – and for them to do so as well. You do not want to take on any large financial obligation with someone who may not reliably pay their share of the mortgage, taxes, insurance and homeowners’ association (HOA) fees – or who refuses to pay for repairs and upgrades.
You also want to enter into the purchase with someone who plans to remain there for as long as you – unless you are prepared to buy out their portion of the home or sell it if they decide to move.
Cohabitation and other legal agreements
It is typically recommended that unmarried couples who purchase a home together have a cohabitation agreement. This codifies how much of their own money each has contributed to the purchase, both people’s financial responsibilities for all expenses connected with owning and maintaining the home and what they will do with the home if they end the relationship.
It can also codify how assets in the home will be divided. One real estate teacher recommends that the co-owners “list in detail any appliances, furniture, and other personal property articles brought into the joint household, and those amassed during your period of living together, and indicate how this property will be apportioned and handled if one or both parties decide to move out.”
Remember that if two (or more) people are buying a home together, they all have to sign all the required documents. That means each person should fully understand what they are signing and agreeing to. It is beneficial for each person to have their own legal representation to protect their interests.
