First comes love, then comes marriage, then a house and then a baby… sometimes. Today, it’s common for unmarried couples to buy a house together. Millennial couples are more likely than other generations to buy a house before getting married.
Fifteen percent of buyers under age 37 were unmarried couples in 2018, according to the National Association of Realtors’ 2018 Profile of Home Buyers and Sellers. Among all homebuyers, eight percent were unmarried couples.
Financial and legal considerations for unmarried couples buying new homes
When buying a new home together, unmarried couples need to work out financial and legal agreements to protect their investment. Some issues to address include:
- Financial split. If both partners are on the mortgage, both are fully responsible for the repayment of the loan. It’s smart to discuss how much each of you will contribute for the down payment and monthly expenses of homeownership. A real estate lawyer can write an agreement and the deed to the property can specify the percentage each partner owns of the property. Unmarried couples buying a home will need to address tax issues, too.
- Legal title. While married couples typically choose to own as “tenants by entirety,” that option is unavailable for unmarried couples. A real estate attorney can help you choose whether to own as “joint tenants with the right of survivorship” or “tenants in common.” The choice depends on what you would want to have happen to the property if one of you passes away.
Unmarried couples buying a new construction home
Purchasing a new construction home offers advantages for unmarried couples.
- Time: Typically, a newly built home will take six to nine months to build from when you sign the contract to your move-in day. While construction takes place, you and your partner have time to save more money and plan your move.
- Money: Most builders recommend a preferred lender or an affiliated lender for their buyers. In some cases, incentives such as closing cost assistance are offered for choosing a preferred lender. Preferred lenders have experience in the new home process and can guide you towards smart financial choices. Preferred lenders are extremely familiar with the builder and the title company, so you won’t have any surprises when it comes time to close on your new home. You will be guided through the process seamlessly, from start to finish.
- Simplified choices: Rather than search for resale homes and have a home inspection to estimate the costs of home improvements, when you buy a new construction home you can focus on the lot, the floor plan and design choices. No need to worry about what might be wrong with your house after move in day; your house will be brand new and warranty protected. Many builders offer a “good, better, best” group of choices that further simplifies your decisions. Others have design center professionals who can walk you through the process and give you advice on what details are right for you.
- Maintenance-free living: One advantage of moving into a newly built home is that you won’t need to worry about the stress and expense of repairs and maintenance. Not only will your home have all new systems and appliances, but most builders provide a warranty for at least one year on those systems.
- Lower costs: Homes built to today’s construction standards are typically more energy-efficient even than older homes that have been retrofitted for energy-efficiency. As you adjust to homeownership, lower utility bills from those new appliances can significantly help your cash flow.
- Guidance: New construction builders have their process down to a science. The builder representative will lead you through every aspect of the home buying experience, answering all your questions, keeping you informed of the home’s progress, and helping you prepare for each step along the way.
No matter what type of new home you choose to buy with your partner, having agreements in writing and a paper trail of your transactions will help protect both of you.
To learn more about the buying process for new construction, check out the New Home Guide Blog.