Can an Unmarried Couple Buy a House Together?

Buying a home is a major step, and for unmarried couples, it presents unique considerations. While common, purchasing property together requires distinct planning. Navigating ownership, finances, and legal protections requires clear communication and proactive decision-making.

Property Ownership Structures

Unmarried couples typically choose between two ways to hold title to a property: Tenancy in Common (TIC) or Joint Tenancy with Right of Survivorship (JTWROS). Each structure carries different implications for ownership shares, inheritance, and the ability to transfer interests.

Tenancy in Common (TIC) allows each co-owner to hold an undivided interest in the property. Ownership shares do not have to be equal; for example, one partner could own 60% and the other 40%. When one co-owner dies, their share does not automatically pass to the surviving co-owner but instead transfers to their heirs as specified in a will or living trust, or intestate laws. Each tenant in common can also sell, mortgage, or otherwise transfer their individual share independently without the consent of the other co-owners.

Joint Tenancy with Right of Survivorship (JTWROS) means that co-owners hold equal, undivided interests in the property. JTWROS includes a “right of survivorship,” meaning if one joint tenant dies, their interest automatically transfers to the surviving joint tenant(s), bypassing probate. To establish JTWROS, all joint tenants must acquire their interest at the same time, through the same instrument, hold equal interests, and have the same right to possession. A joint tenant cannot sell or mortgage their share independently without severing the joint tenancy, which converts ownership to tenancy in common.

Community property laws, which apply to married couples in some states, generally do not extend to unmarried couples. While some states offer domestic partnership benefits that may include certain property rights, these typically require formal registration and do not automatically confer community property status on assets acquired by unmarried partners. Without specific legal agreements, property acquired by unmarried partners is generally treated as individually owned unless both names are explicitly on the title.

Financial Contributions and Management

Managing the financial aspects of shared homeownership for unmarried couples involves securing a mortgage, handling ongoing expenses, and understanding tax implications. Careful planning and clear communication avoid disputes.

Unmarried couples can apply for a mortgage together, typically through a joint application. Lenders will assess the credit scores and financial histories of both applicants, which can impact loan approval and interest rates. It is important to ensure both partners understand whose names will appear on the mortgage loan documents and the property deed, as these can be distinct.

Initial contributions, such as the down payment and closing costs, should be clearly defined and documented. Couples may choose to split these expenses equally or proportionally based on income or other agreements. Closing costs include various fees. Documenting these contributions helps establish ownership stakes, especially if partners contribute unequal amounts.

Ongoing expenses for the home require a structured approach. Mortgage payments can be divided equally or proportionally, aligning with initial contributions or income levels. Property taxes, homeowner’s insurance, utilities, and costs for maintenance and repairs also need to be managed. Many couples find it beneficial to use a joint bank account for shared housing expenses or utilize expense tracking applications to monitor contributions.

For tax purposes, only the person whose name is on the mortgage and who makes interest payments can deduct mortgage interest. Property tax deductions are tied to who actually pays them. Understanding who is financially responsible for which payments is important for tax purposes.

Formalizing Agreements

For unmarried couples, a formal written agreement, often called a cohabitation or property agreement, is crucial for defining responsibilities, expectations, and protecting each partner’s investment. This document helps prevent disputes by clarifying terms before issues arise.

The agreement should explicitly state the percentage of ownership for each party, particularly if contributions are unequal. It should detail how initial and ongoing financial contributions, as well as responsibilities for expenses like mortgage payments, property taxes, and utilities, will be managed.

Provisions for home improvements are important, outlining how costs for renovations or major repairs will be shared and how any resulting increase in equity will be allocated. A key component of the agreement is an exit strategy, addressing what happens if one partner wants to sell or if the relationship ends. This includes clauses for buyouts, selling the property, and methods for valuing the property at that time.

The agreement should also consider scenarios such as the death or incapacity of one partner, clarifying what happens to the property beyond the default of a joint tenancy. Including a dispute resolution clause, such as requiring mediation or arbitration, can help resolve disagreements without resorting to costly litigation. Each partner should seek independent legal counsel when drafting or reviewing such an agreement to ensure it is fair, comprehensive, and legally enforceable.

Steps in the Home Buying Process

After establishing a financial plan and formalizing their co-ownership agreement, unmarried couples proceed through the home buying process, from securing financing to closing.

The process typically begins with obtaining a mortgage pre-approval. A pre-approval letter indicates how much a lender is willing to loan, based on a preliminary review of income, credit, and assets. This step helps define the home search budget and signals to sellers that the buyers are serious and qualified.

Next, finding a real estate agent who understands the nuances of unmarried couples buying property can be beneficial. The agent assists in identifying suitable properties, negotiating offers, and guiding the couple through the complexities of the market. Once an offer is accepted, due diligence phases begin, including home inspections to assess the property’s condition and an appraisal to determine its market value for the lender.

The mortgage underwriting process follows, where the lender verifies financial information, employment history, and the property’s value. This stage can take several days to a few weeks. Promptly providing requested documentation can help expedite this phase.

Closing typically takes place four to eight weeks after an offer is accepted. At closing, all necessary documents are signed, including the deed, mortgage, and promissory note. Both partners, if on the mortgage and deed, will need to be present to sign. Funds for the down payment and closing costs are transferred, and ownership of the home is officially transferred to the buyers.