Purchasing a house, no matter how big or small, is a major financial decision. If you’re on your own, it will become an even bigger challenge for you. This is why some people ask others to become their partner so that each of them could share the load in exchange for co-ownership. It sounds like a great idea, and it can be, but you would have to think carefully about these particular points. If not, you might get yourself into a bigger mess than you thought.
Purchasing a house with a partner can get you better mortgage rates for your dream Ogden, Utah home. However, whether or not you’ll be approved for it as well as how much you’ll be able to borrow is up to your combined credit ratings. You may be thinking, “Oh great, my partner can make up for what I lack!” But if one has too low a score for the other one to offset, then you’ll likely get into trouble. Check each other’s status first before you make a decision. If you find that you’re not ready in this aspect, then you can work on improvement in the meantime.
Whose Is Which?
Unless you’re married, which would likely mean that the two of you own the property as one person and pay for it as such, chances are that you’ll be splitting responsibility and ownership for the house as individuals. In this case, it’s best for you to work out who pays how much as well as who owns which. If you can, and you should, put the agreement into writing. That way, in case that the two of you ever have a fight about it, you’ll have a basis for settling it.
Consider the Reasons for Purchase
Sometimes, partners purchase a property but what they don’t know is that they each have different ideas and plans for it. Before you buy your house and make any changes to it, make sure that you’re on the same page when it comes to what it’s going to be used for. Just like with the agreement on ownership, this will also reduce the likelihood that you’ll get into a disagreement. After all, working together for a single goal is pretty much why you started this.
Another point that you have to consider is what will happen if one of you passes away or wants out of the partnership. Would the remaining individual get what the other left behind? Would someone else become the new partner? You should put this in writing, with the help of a lawyer, so that you won’t be in a panic when the unexpected happens. It’s so much better to be safe in this case.
The most important point to remember when you’re going into a house purchase with a partner is to make your agreements clear. From how much each of you can contribute to the mortgage, to who gets which, to what you’ll use the property for, to what you’ll do when one leaves the partnership. This will save you a lot of time, money, and trouble. If your partner is your friend, you’ll be able to stay friends and support each other.