Risks for Non-Married Buyers
Buying a home is often times the largest and most financially complicated move someone can make. Unlike for married couples, there is no state or federal estate planning protection for non-married individuals. At a minimum, this can cause some inconveniences in the event of a break-up or death of one of the partners. However, in the worst case scenario, you could end up with a foreclosure. Therefore, it's your responsibility to seek legal protection on your own. If you're a non-married, joint home buyer, you'll want to protect your interests before closing on a home with another individual.
Steps to Take Before Buying
1. Put Everything in Writing.
Whether you completely trust your partner or not, unless you are married, you should get everything in writing. You never know what the future will hold and unfortunately, break-ups happen, and they aren't always simple. The best thing you can do is hire an attorney to help you get everything in order before you sign the closing documents on a new home together.
The property agreement states who owns what in regards to the property accumulation while living together. This document should also state what happens if one or both partners decide to move out. A well-drafted property agreement will include more than just the actual home, and should include property such as furniture, appliances and other items accumulated during the cohabitation period. This is the step where you'll decide who's name or names go on the deed. You'll need to choose between sole ownership, joint tenancy or tenants in common. Each option has its benefits and risks, so talk to your attorney about which is right for your situation.
3. Sign a Cohabitation Agreement.
A cohabitation agreement states which individual has financial responsibility for various home-related expenses and payments. The agreement should include details on who is responsible for the mortgage, real estate taxes and homeowners insurance, the downpayment made on the mortgage, and any necessary repair issues that arise. The document should also include what would happen in the unfortunate event of a break-up or death of one of the partners.
What would happen if something unexpected happened to your partner? Would you be able to pay off the mortgage on your own? By taking out a life insurance policy on both partners, you'll both be financially protected in the event that something happens to your partner. You'll have enough money to continue paying off the mortgage and won't have to worry about a place to live while you're grieving and dealing with other important issues.
If you're in the market to purchase a new home with your partner, now is the time to start talking to both an attorney and a Lake of the Ozarks mortgage lender. For all your home financing needs, contact your local Lakelender, Michael Lasson at 573-746-7211 today. I'm here to work with you every step of the way and help get you into your dream home!
For Lake area news, resources and tips on financial services, please
Michael Lasson
Email: mlasson@fsbfinancial.com
**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.
Michael Lasson
Sr. Residential Mortgage Lender
NMLS #: 493712
2265 Bagnell Dam Blvd, Suite B
PO Box 1449
Lake Ozark, MO 65049
Direct: (573) 746-7211
Cell: (573) 216-7258
Fax:(573) 693-9141
Email: mlasson@fsbfinancial.com
**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.
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