There are lots of reasons for couples to remain unmarried in the 21st century, and today no one would bat an eyelid at the thought of two people who love one another choosing to buy a property together, regardless of their marital status.
However, there are still a whole heap of hoops to jump through before you can actually become a homeowner, so here are a few things that unmarried couples should bear in mind as they start to think about applying for a mortgage.
Credit score has a big impact on mortgage affordability
While your credit score is not the only factor that will influence the mortgage rate you are offered, it is definitely something that you need to keep in mind, according to MoneyWise. In fact, you will likely find that the person in the couple who has the highest score will be in the best position to secure a deal that has lower monthly repayments attached to it.
This may prompt some couples to not apply for a joint mortgage, but instead use just the individual with the highest credit score to seek out a suitable package from a lender. Of course this may only make sense if one person has a very low credit score which might hurt the chances of a successful application; otherwise a joint application might still be best since your combined incomes will be more reassuring to mortgage providers.
The one area in which unmarried couples are left a little more exposed than their married counterparts is that of ownership rights over any property they purchase. This is where signing a cohabitation property agreement, written up and overseen by an experienced attorney, is potentially sensible.
The purpose of this agreement is to define exactly who owns what and the process by which future disputes can be resolved. If you do not have such an agreement in place, it could get tricky if you decide to separate and only one of your names is on all the mortgage documents, as you will not have the same innate protections provided by marriage law.
While it is true that some states recognize the rights of common law marriage, which might give you the impression that a cohabitation property agreement is unnecessary, in reality it is far more secure for all parties to formalize these arrangements as part of the property purchasing process.
The affordability of your mortgage is not just about whether you will collectively be bringing in enough cash to cover the payments, but also whether you will have enough income left over to live on, as well as to save for a rainy day.
As with any aspect of being in a couple, unmarried or otherwise, you need to calculate the costs of living that you will face once you become homeowners, and also orchestrate how you will cover these collectively, rather than getting overwhelmed by the many outgoings you will inevitably accumulate together.
Setting up a joint bank account is a good way of doing this, as it creates a central pot to which you can both make contributions, and from which you can draw everything from mortgage and utilities payments to home insurance and house maintenance expenses.
In all an unmarried couple can put themselves in just as strong of a position as a married couple when buying a home; it is simply sensible to plan this incredibly carefully and get all the expert help you can, rather than rushing into it.