Mortgage or Marriage Certificate

No, this in not one of those chicken or the egg conversations.  I want to touch on the practical side for those Edmond, Oklahoma friends and neighbors deciding whether or not to purchase a home with their partner before getting married.  Here are three factors to consider when contemplating taking out a mortgage before turning your significant other into your wife or husband.

  1. Mortgage approval.  Banks prefer to see two supporting incomes during the mortgage approval process, even if the couple applying together are not (yet) married; more income equals better ability to repay.  However, if one of the two applicants has a poor credit score their inclusion on the mortgage application can actually hurt your chances for securing financing.  In that case you might consider having the applicant with the superior credit rating apply alone.  Of course that leaves you with only one qualifying income to support your application, translating to an approval for a smaller loan amount.  Hmm…Much to consider.
  2. Down payment.  Are you both able to equally contribute to the down payment on the home purchase?  If not, why not take the practical step of including how much each of you do contribute in the mortgage paperwork just on the chance that the relationship dissolves before anyone ever walks down the aisle.  This way everyone protects their equity, and you both can move forward confidently purchasing a home before signing a marriage certificate.
  3. Title.  How will you, as an unmarried couple take title to the property?  Divorce, and the subsequent division of property can become a very messy ordeal.  Breaking up, for unwed couples who own property together can be just as trying because the individuals are not afforded the same legal protections as married couples.  If you’re considering buying a home before marriage write up a legal contract spelling out who is responsible in the event of a break for ongoing issues like the mortgage, taxes, maintenance costs, capital gains, and more.

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