Couples often dream of homeownership. This big financial step typically occurs after the vows are spoken and the rings are exchanged. You might want to buy a house before you get married, however. Buying a house when engaged is a different process than buying a house while married. The unique complications of owning property without marriage mean you have extra steps to take.
Work Out the Finances
Houses cost a lot of money. Decide the amount each person contributes to the down payment on the mortgage. Figure out how much money you can afford to pay for the house and the subsequent mortgage payment each month.
Setting Up the Title
For unmarried couples purchasing a house, the property title might indicate tenants in common, joint tenancy or just one person on the title. Joint tenancy is often how married couples are listed. Each person has a share in the house and cannot give up that share to anyone but the other owner. The tenants-in-common designation provides more flexibility allowing one person to sell their share of the house.
Prepare For the Worst
Discuss your options when it comes to death or severance of the relationship. Joint tenancy provides for right of survivorship. The surviving owner gets property rights. Tenants in common do not have the right of survivorship. It goes into the person's estate. Decide what to do if your relationship dissolves such as buying out a partner or shares in the property equity.
Your Credit Report
Acquire both of the partners' credit reports to find out your current credit standing. You entitled to one copy of each credit report -- from TransUnion, Experian and Equifax -- on a yearly basis from AnnualCreditReport.com. You would need to purchase your credit scores from each credit bureau, however. Fix any errors on your credit report prior to applying for your mortgage loan. You need the best possible credit score and report to get the best rates.
Applying For the Mortgage
Assemble your paperwork for the mortgage application. You need your tax returns for two years, W-2s, list of creditors, list of debts and a pay stub. Approach several lenders to rate shop for your mortgage. Fill out their applications and supply your financial information. Pick the mortgage with the best rate and terms for your personal situation.
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