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Fri, Oct. 18

How to share a deed without an ‘I do’

My partner had a goal: He wanted to be a homeowner by 30. A natural at saving, he built up a down payment throughout his mid-20s. I, on the other hand, always struggled to save.

We were committed to sharing the road ahead, but without rings or legal documents tying us together, we wanted to take a smart approach. Our story is hardly uncommon for the Millennial Generation. Nearly 25% of homeowners ages 18-34 purchased a house with their current spouse before marriage, according to a 2013 study from Coldwell Banker. That’s in contrast to just 14% of those 45 or older. Here’s how you can do the same:

• Chances are you two aren’t in exactly the same situation; maybe one of you earns more. Talk through the aspects that determine how much you can afford: income, savings, debt load and credit. Know where each of you stands to get a picture of how you’ll both contribute. Be at a job for a year or more before buying a home.

• The biggest challenge is building a down payment. Will you both save, or is one going to do more? Many lenders prefer a 20% down payment; however, 67% of millennial home buyers put down less than 20%, according to a 2019 survey by Clever, a real estate service.

With a smaller down payment, you’ll likely face higher upfront fees and monthly payments, as well as costs like mortgage insurance.

• While you save, work to improve your credit profiles. Lenders prefer a credit score of at least 630; borrowers with scores of 700 and higher get better rates.

• Lower your debt-to-income ratio by paying down accounts like credit cards.

• Unmarried couples don’t have the same protections in the event of a separation as our ring-clad counterparts. Have a legal agreement before mortgage papers are signed; meet with an attorney and put everything in writing while everyone still gets along.

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