Millennial couples are more likely than older generations to purchase a home together before marriage, according to a Coldwell Banker Real Estate Survey. Nearly 25 percent of today's married homeowners between the ages of 18 and 34 purchased a house together before they were married. In contrast, only 14 percent of couples age 45 and older said they had done so.
In an era when two-thirds of couples live together before marriage, many millennials view purchasing a home as an important step toward strengthening their relationship and demonstrating their commitment to one another. Other younger couples are motivated by a desire to take advantage of low interest rates and home prices. By choosing to delay their wedding expenses, these couples may be able to purchase homes that they could not afford otherwise.
Considerations for Unmarried Homeowners
When buying a home with a significant other before marriage, there are some important issues that must be addressed in advance. Perhaps the most important consideration for unmarried homebuyers, though it may be uncomfortable to contemplate, is what will happen to the house in the event of a breakup.
Before signing a mortgage, unmarried couples should work out a detailed plan for how the property will be handled if the relationship ends. While hopefully it will never need to be carried out, creating a plan in advance is typically much easier than haggling about the house in the midst of a breakup. Not only that, but planning ahead will help ensure that the property is handled in a way that is fair and agreeable to both partners if the couple ever decides to part ways.
Along with the property division issues that may arise if the couple breaks up, unmarried partners should also discuss what will become of the home if either partner should die. Depending on how the property is titled and whether the partners have estate planning documents in place, it can be relatively easily for unmarried homeowners to unintentionally disinherit one another. If one partner dies without having taken steps to ensure that the property goes to the surviving partner, the parents or other relatives of the deceased homeowner may automatically take ownership of the property instead.
Couples planning to purchase a home together should also discuss what they plan to do with the house if either partner declares bankruptcy or becomes unable to keep up with his or her share of payments on the home.
Create a Legally Enforceable Agreement
For unmarried partners considering homeownership, discussion of these issues should be a priority before taking steps toward purchasing a home. But as important as it is to talk these issues over, it is equally important to make sure that any agreements reached by the partners be recorded in a legally enforceable document.
For assistance with these and other important legal considerations when purchasing a home, unmarried couples should consult with an experienced attorney in their area. A lawyer with a background in family law and estate planning can help unmarried partners explore their options and protect their mutual interests with a legally enforceable partnership or prenuptial agreement.