Love and Mortgage: Advice for Unmarried Couples Buying Houses

Advice for Unmarried Couples Buying Houses
San Diego, CA – Rising home values, low interest rates and a shortage of listings in southern California mean that although not every couple is ready to tie the knot yet, many of them are ready to play house.
Eight percent of homebuyers in 2017 were unmarried couples, according to the National Association of Realtors Home Buyer and Seller Generational Trends report. Thirteen percent of millennials who purchased homes last year were unmarried couples, which represented the largest share of all generations.
This trend has been around for a few years. One in four couples ages 18-34, and 14 percent of couples ages 45 and older bought homes together before they were married, according to the 2013 Coldwell Banker Marriage and Homebuying Study.

Avoid the Pitfalls

Before you find that dream home and imagine where you’ll place the sofa, follow these tips to help combat the risks associated with such a purchase.

There are laws in place to protect property rights in the event that a married couple decides to divorce, said San Diego family lawyer John Griffith. California’s community property laws state that property acquired during the marriage must be divided equally.

“But things can be a bit more murky when it comes to determining who gets the house when an unmarried couple breaks up,” Griffith said.

Get a “prenup” for the house. An attorney who specializes in family or real estate law can help you draft a contract that addresses possible outcomes.

The contract should outline what happens to the property if you break up, or what to do in the event that one person becomes disabled or passes away, according to NerdWallet. This contract also can outline which person is responsible for paying utility expenses and repairs.
An attorney also may offer advice on the best way to hold title on a home. In California, there are four options:

  • Sole ownership- The home is in one person’s name.
  • Tenants in common- The home is in both partners’ names, but it doesn’t have to be a 50-50 split.
  • Community property- This is an option for married couples and domestic partners. Each person owns 50 percent of the property.
  • Joint tenancy with right of survivorship- Each person owns half of the property and if one owner dies, the surviving owner becomes the sole owner of the property.

The Benefits

Home ownership is almost always a wise investment, and there are several notable benefits to taking the plunge even if you aren’t married.
Rental costs are on the rise throughout the country. “The national average apartment rent in 2017 increased by 2.5 percent… at the end of 2017, and San Diego ranked third in highest rate increases in 2017 of all large cities, according to Rent Café.
Purchasing a home means that you have something to show for your money.

Mortgage rates remain low, even though they have begun to inch upward in 2018. Low mortgage rates can save homeowners thousands in interest through the life of a loan.

If you bought your home after Dec. 14, 2017, you can deduct mortgage interest from income taxes on up to $750,000 in mortgage debt used to purchase or improve a home as an itemized deduction, according to Forbes. If you purchased your home prior to President Donald Trump signing the new tax law into effect on Dec. 14, you can deduct interest on up to $1 million in mortgage debt.

Unmarried couples who plan to purchase a home together have twice the buying power of a single person purchasing a house, which means they may be better able to meet the price increases of this housing market.

Please call our office to schedule a consultation if you would like assistance in making your homeownership dreams come true, while protecting your interests in the unfortunate event that you and your partner part ways.

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