Buying a Home with Someone You’re Not Married To

By Okenwa Aguwa, Mortgage Loan Officer

Is it possible to purchase a home with someone you aren’t married to? Of course it is. The process is a little different, but in the end you can own a house and be on a mortgage loan with another person who isn’t your spouse.

Here are some important factors to consider if you are planning on taking this route:

  • Both borrowers must have qualifying credit scores and income, combined assets, and meet program guidelines to be approved for the mortgage.
  • Determine how the title will be held (the ownership rights).
  • Consider creating a legal contract and/or working with a lawyer to build one which outlines what happens if the relationship with the other party is damaged and the house is to be sold. This is critical because there aren’t concrete laws regarding joint property owned by people who aren’t married to each other.

When considering the vesting (title/ownership of the house), there are a couple different options. The two main options are either choosing tenants in common, or joint tenancy. Joint tenancy gives a right of survivorship, and tenants in common does not.

Joint tenancy is often used by a married couple, and each person is considered to have the same amount of equity as well as debt on the property. One party cannot mortgage or sell the property without the other owner’s consent. The right of survivorship means that when one owner dies, the co-owner automatically inherits the property bypassing the probate process.

Tenants in common may have a different split of ownership share in a property. If one owner does have a larger share of a property, they cannot limit the property’s use on those who own smaller shares. Also unlike joint tenancy, owners and percentages can change over time. Parties can sell their share of a property to another party, and they can do so without consulting the other owner(s).

Speak with your mortgage loan officer if you have questions about title and vesting options.

The Loan Process

The process for applicants is the generally the same as everyone else. You would apply, have your credit pulled, submit your documentation, go through the home selection and underwriting process along with your co-borrower, and then close.

Risks Involved

Taking ownership of a large asset like a home comes with risk, and like any financial transaction it is important to understand those risks before making decisions. Both borrowers who apply for and eventually close on a mortgage assume the risk of the debt liability of the mortgage. Keep in mind your individual circumstances can change in the future, and both parties should consider this fact of life. Think about scenarios like what if someone wants to move out or sell the property at some point in time. Always ask questions to understand everything involved in the process to a licensed mortgage professional.