There are many things to consider before taking the plunge and buying a house with your partner — and the biggest decision could be marriage. Scott and Bethany Palmer at YourTango have three reasons you should wait until you tie the knot to purchase a property. Do you agree?
Don't buy a house together before saying "I do."
You may be itching to take that next step in your life and your relationship by investing in a house together, but you can save yourself a lot of heartache by avoiding the new trend of millennial couples who are buying homes together before getting married.
A study by Coldwell Banker found that "about one in four married couples younger than 35 bought their first home together before they actually tied the knot."
And although more and more couples are making this enormous financial commitment, how smart is it really?
Even if buying a house is on your bucket list, here are three reasons not to buy a home with your honey before you're married:
1. No marriage contract means no home contract.
The major difference between dating and being married is a commitment to one another for life, contractually. It is truly, "Signed, sealed, delivered — I'm yours!" without that marriage contract, financial arrangements are murky and messy.
In fact, a New York Times article reports that "real estate lawyers say that there are more complications for unmarried property owners who part ways than there are for married property owners who divorce — and a less clear process for resolving them."
"By default, our laws are suited for married couples acquiring assets," says Luigi Rosabianca, a real estate lawyer in Manhattan. So if you are not willing to commit to each other for life yet, then entering into a financial commitment — like buying a home together — is a bad move right now.
2. You will be married to your partner's credit.
When unmarried couples enter into a financial contract — like a home purchase — both credit scores are affected by the success of that joint agreement. If your boyfriend decides he's done with the relationship, their credit is now attached to yours because you share a mortgage.
Getting their name off of the mortgage can be a major legal battle and more difficult than getting that sofa-sleeper or finding a new place to live.
According to Realtor.com, if one party defaults on the loan, it affects each borrower's credit score negatively and could lead to foreclosure, which drops your credit score by 100 to 300 points and negatively affects it for seven years.
3. Your breakup will be even more complicated.
If you think breaking up is hard, try it with a home-sized asset right in the middle of it. Your heart is broken, your dreams are shattered, and now you have to decide: Who stays and who goes? Do you have to split the proceeds of the sale? How will you be reimbursed if you have already invested in home improvements — like new sod, a sprinkler system, surround sound speakers or a fresh coat of paint?
Dr. Thomas Bradbury, a PBS relationship expert reports, "Partners in cohabiting relationships . . . report higher levels of aggression in their relationships and more problems resolving disagreements."
Now that your relationship is over, your unresolved disagreements have a price tag attached. There have even been cases of cohabitating couples suing each other over back payments and mental distress damages.
We want your relationship to last for the ages — longer than a 30-year mortgage — so buck the trend and delay your home purchase until you're officially wed. Then, you can celebrate your commitment to your marriage, your future, and your home with monogrammed mugs for your new breakfast bar.
Scott & Bethany Palmer, The Money Couple, are financial experts who help individuals tackle money issues in their relationships. To learn more about how you are wired to handle money, take the FREE online Money Personality Assessment.
Check out more great stories from YourTango:
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- 3 Ways to Build an Epic Relationship (Because Lasting Love Is No Coincidence)