Tuesday, October 02, 2007

Part II: Buying a house while being unmarried

Well yesterday we discussed how difficult it can be to merge finances as a couple. It appears to be increasingly difficult as you get older. Even harder to navigate is whether to buy a house together. At around 30 whether you are single or not, it seems many people get bitten by a bug to buy a home.

But the question is how do you buy a house together if you are an unmarried couple? The simplest route and one which I took is buying the house 50/50. Where both people put down approximately equal amounts and each pay 50% of the mortgage. Then if you split up, the house is split 50/50.

However the real trouble arises when there is a disparity between the couple regarding the down payment and affordability. K mentioned that they were in negotiations for how they will manage buying a house together as an unmarried couple. First problem is her BF will be supplying 90% of the DP, and she will supply 10%. This is causing a bigger problem because they have to negotiate all details in a written agreement because her BF's DP is a "gift" from his parents. Hence they need to settle what they are going to do.

BF wants the equity to be split on DP. But K wants to keep the equity she pays down because she'll be paying 50% of the mortgage. So I'm not sure what they are going to do. Because financially this is not just a business transaction, it's a relationship. I can see both sides of the argument, BF is taking more risk in buying the home by putting more money down. But K is also taking risk and she's paying down equity so she wants to keep her dollars.

But what is the answer? I guess we'll have to see what they decide to do. My advice? Don't buy the house, just get married then buy the house and it won't matter.


Anonymous said...

For a young couple, I don't understand the willingness to commit to buying real estate together if you can't commit to getting married. Co-mingling finances when you are not married is not a good idea.


Living Almost Large said...

We didn't get married because we decided to buy a house instead. We used all our savings to buy and felt we wanted a "big" wedding. Our parents both felt if we couldn't pay for a wedding then we shouldn't be getting married.

We paid in full for our wedding 100% and honeymoon too. We did initially get married in front of a judge quietly for legal reasons, but 1 year later we had a wedding for our families.

So we made a conscious decision not to wed young because of our house. Also if we had chosen to get married our parents would have been angry because they felt we were too young at 26 and 28, imagine how they would have felt at 22 and 24.

So a lot of reasons can play into it. I am a bit upset that my friend isn't getting married when I know she wants to. I think at 29 and 31 they should be ready for the commitment or not. They are done with school, financially have good jobs, so I'm not sure what the hold up is. Especially since she knows she wants kids by 35 and would like 1 year of marriage before rushing into kids.

Anonymous said...

If you're worried about what your parents think, then you are too young to get married. Parents are to be respected, but it sounds like you have some boundary issues with yours and are a bit too emeshed in each other's lives. Perhaps it's just a cultural thing. But as adults (even at ages 22 and 24), one shouldn't let one's parents dictate life plans and/or finances.


Living Almost Large said...

LOL, nope, but it's better off to start off on the right foot. Parents always try to be parents. Not all are so enlightened as to be nice.

So we played along and respected their wishes. We set a firm date and stuck with getting married. We tried to keep our relationship on good terms with our parents.

Would they have disowned us at 22 and 24? Probably, but not all parents are kind and understanding.

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The couple is married then his wish he buy the house and easy live in this house.