Pre-marriage considerations before buying a home

Are you considering getting married soon? Well, do you have a home you can go home to after the wedding and the honeymoon? Hits the spot, right?

Instead of shopping for a sparkly ring, many couples today in a committed relationship are looking for an even better investment: a newly purchased home. A study by the Coldwell Banker Real Estate found out that one in four couples between the ages of 18 and 34 already bought a house before getting married. That’s about 14 percent of those aged 45 and older!

One of the most compelling reasons behind this decision is our low mortgage rate environment. Other benefits include the ability to reduce mortgage interest from income taxes as well as the ability to build equity over time. Add this to the rising rental costs in some areas, and buying now rather than delaying home ownership after marriage makes sense.

Strategize before taking action

Married couples have a large body of law to protect them if their rights for union dissolves. Unmarried partners face unclear law regarding this matter. While you won’t be going into a relationship thinking the worst, it will be harder to break the co-ownership of a house than it is if you get a divorce. Consider the five tips below before consulting a realtor.

1. Be transparent. Before buying a home with your partner, discuss your financial history in honest terms. It’s possible to marry first before knowing how much your spouse has in credit and how much he/she is currently earning. When qualifying for a mortgage, your loans, savings, and salary and credit card debt are all on the table.
2. Get a prenup for your home. Some unmarried couples today think that the standard real estate purchase agreement is everything they need when purchasing a home together. Buying your home is the largest asset and largest debt; therefore, it’s crucial to have a legally binding agreement that protects both of you financially should something go awry. A partnership agreement or sometimes called a home-buying prenuptial, addresses this issue such as how the mortgage will be paid, who pays for what, and who is contributing financially. This way, any dispute can be settled easily without mediation or litigation.
3. Understand your options. Most unmarried couples want a home together, yet you need to consider all your options before continuing. How the property is titled affects the way in which the home can be transferred and the tax consequences that will come into play. Basically, couples have three choices for taking the title. One person can hold title as a sole owner, or both can hold title as joint tenants or even as tenants in common.

Once you understand all of these tips, the question now is “where do I buy our first home together?”  There are hundreds of available locations, so consider going online to save on time, energy and gas. Consider Sydney real estate from McGrath, if you’re looking to buy a home in the beautiful city of Sydney. You won’t find a better listing online.

Your home is a shared joy, and your biggest asset. Married or not, having a detailed plan for buying and managing that home ensures that both you and your partner are protected through the remainder of the mortgage.