“People are waiting longer and longer to get married”—that’s the story that’s been making the rounds on social media as of late. The reasons for this trend have been talked about to death. But one area often ignored: what are the economic ramifications of buying a house together for unmarried couples?
What to consider before buying?
Now more than ever, our culture is open to the idea of couples living together before marriage. But you can’t just go into it cold—you have to sit down and hash a lot of things out before you sign any paperwork. For example:
- Whose name will the house be in?
- How much can you (collectively) afford?
- How much will each person contribute to the cost?
- Who’s going to be in charge of cooking, cleaning, bill-paying, and other chores?
- And possibly the biggest one: What happens if you break up?
What are the backups for future?
No matter what you and your partner decide, the next important step before you put any money down is to draw up a domestic partnership agreement. No one wants to think about a potential breakup while they’re still in that honeymoon phase but if you don’t have a signed document, where you both agree to the terms of the home-buying process, things could get messy if you decide to break up.
The important things to discuss could revolve around questions such as:
- Will one of you get to keep the house?
- Will you continue living together until the other person can find a new place?
- If you decide to sell the house, how much money will each person get?
- What about furniture and other belongings that you purchased together?
It’s better to deal with these questions now, rather than pay a couple of lawyers to answer them for you down the line.
Why is planning important?
This isn’t meant to dissuade you from buying a house with your partner—far from it. Living together before getting married can lead to longer, healthier relationships over the long term. Just be careful in your planning and don’t rush into things.