Young ones, before you face a loan officer for a mortgage and buy a Nashville home, you may have to consider your situation first. Unwed couples will have to think and discuss more matters than the usual after all.
Lack of Protection for the Unwed
Married couples have several laws that protect both individuals regarding their properties and finances. On the other hand, migonline.com and other experts explain that a mortgage and home purchase can be a disastrous burden if you and your partner split up. Sadly, unwed couples lack the same protection. Without protection, unwed couples run the risk of facing a messy future with their mortgages and homes.
Discuss Cost Split
Before taking out a mortgage and buying a house, talk about all the important financial matters. For one, decide how you will split up housing costs. The ideal situation naturally sits at 50-50; you both have stable and high-paying jobs and high credit scores. In reality, however, you will have different incomes and credit scores.
Manage Your Credit Scores
You can work things out by discussing your income and credit score. Low credit scores especially need to be discussed since this can affect your loan application. The earlier you learn about your credit score, the earlier you can work on raising them.
Create a Legally-Binding Contract
Once you know what each of you can contribute and what your credit scores are, you can now prepare a contract. This will help keep you both in line and to protect you in case of a break-up. In the contract, you can establish how much each of you pays and how much equity each of you gets from the house.
You can also set terms in the contract, like what will happen to the house and mortgage when you break up. It may be difficult to draw terms, but these will protect you both in the end. Spell everything out and consider all possibilities to cover all bases.
You can be protected when you purchase a home as long as you set the right terms.