Can you get a mortgage with someone you’re not married to?

Buying a home is a significant financial step, and individuals who are not married can obtain a mortgage together. This arrangement has become increasingly common. Navigating this process involves understanding how lenders assess joint applications, addressing financial and legal considerations, and preparing for the procedural steps involved in securing the loan.

Mortgage Eligibility for Unmarried Couples

Lenders evaluate joint mortgage applications from unmarried couples by considering their combined financial profiles. Marital status is not typically a barrier to loan approval; instead, the focus is on the financial strength of all borrowers.

A primary factor is combined income, as lenders aggregate the incomes of all applicants to determine loan affordability. This allows unmarried couples to qualify for a larger mortgage than either individual might secure alone. Lenders also review the credit scores of all applicants. The lowest credit score among co-borrowers often influences loan terms or approval.

The debt-to-income (DTI) ratio, which combines total monthly debt payments and gross monthly income, is also important. A lower DTI ratio indicates a greater ability to manage mortgage payments, making the application more attractive. Unmarried co-borrowers are assessed on their combined assets, including savings and investments, to ensure sufficient funds for the down payment and any required financial reserves after closing. Both individuals on the mortgage application are equally responsible for repayment.

Key Financial and Legal Considerations

When unmarried individuals purchase property together, unique financial and legal considerations arise. An important step is to establish a co-ownership agreement. This legal document outlines how financial contributions will be managed, including initial investments, division of mortgage payments, property taxes, insurance, and maintenance expenses. It also details what happens in various scenarios, such as one party wishing to sell their share, a separation, or the death of an owner, providing a clear framework for dispute resolution.

Consideration of property titling options is also important. The two most common ways for unmarried individuals to hold title are Joint Tenancy with Right of Survivorship (JTWROS) and Tenants in Common (TIC). With JTWROS, owners typically hold equal shares, and if one owner passes away, their share automatically transfers to the surviving owner(s) without going through probate. This provides a streamlined transfer of ownership.

In contrast, Tenants in Common allows for unequal ownership shares, and there is no automatic right of survivorship. Upon the death of a tenant in common, their share passes to their heirs according to their will or state intestate laws, meaning it goes through probate. This option offers more flexibility regarding inheritance but requires careful estate planning.

Regarding tax implications, unmarried co-owners can deduct their share of mortgage interest and property taxes if they itemize deductions. The deduction for state and local taxes, including property taxes, is capped at $10,000 per tax household. For mortgage interest, if two unmarried individuals co-own a home, they can each deduct interest on up to $750,000 of qualified mortgage debt. It is advisable for co-owners to maintain clear records of who paid which expenses, as the Internal Revenue Service (IRS) focuses on actual contributions rather than just ownership percentages for deductions.

Managing shared expenses is also important. Many couples set up a joint bank account for household expenses, where each contributes a predetermined monthly amount. Contributions can be split equally or proportionately based on income, depending on the agreed-upon financial arrangement. This approach simplifies bill payment and provides transparency while keeping individual finances largely separate.

Navigating the Mortgage Application Process

The procedural steps for unmarried co-borrowers applying for a mortgage largely mirror those for other applicants. A significant first step is obtaining pre-approval, which involves the lender reviewing both applicants’ incomes, credit histories, and assets to determine a potential loan amount. Pre-approval provides a realistic budget for home searching and shows sellers that the applicants are serious and qualified buyers.

For the full mortgage application, lenders require documents from each co-borrower. This typically includes recent pay stubs, W-2 forms from the past two years, and federal tax returns for the last two years. Bank statements, investment account statements, and identification documents are also requested to verify assets and identity.

Choosing a lender involves comparing interest rates, loan terms, and customer service. It is often beneficial to shop around and consider lenders experienced with joint applications from unmarried individuals. After submitting the application, the process moves to underwriting, where the lender verifies financial information and assesses the property’s value through an appraisal. Underwriting ensures both borrowers and the property meet lender requirements.

Finally, closing day involves signing legal documents, including the promissory note and the mortgage or deed of trust, officially transferring ownership and establishing the loan. Both co-borrowers will need to be present to sign these documents, and they should bring required identification and any remaining funds for closing costs.