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Is buying a home with a boyfriend a bad idea?

Most potential home buyers look into buying a piece of property with their spouse or by themselves. But a common trend has boyfriend and girlfriend couples scoping the market for a new home.

These types of people have not made a legal commitment to one another, but do not want to purchase a home alone. There can be many problems with this scenario, as well as some advantages.

The article, “Buying home with your boyfriend?” by Steve McLinden featured on Bankrate.com, explores some of the possible disadvantages to buying a home with a boyfriend or girlfriend as opposed to with a spouse or alone.

Of course, when anyone mentions that they are going to buy a home with a boyfriend or girlfriend, the first thing that comes to people’s minds is, ‘What if you guys break up?’s

Since there is no legal contract or pre-nuptial agreement, it is basically a fight of the fittest as to who gets the house if the couple were to split. One suggestion the author makes is to try renting before taking the huge steps of starting up a mortgage.

“I'm certainly not a relationship counselor, but for practicality's sake, it might be better if you two rented a place for a year or so before taking the mortgage plunge, especially if you already suspect there's a chance things won't work out. With your move, you will each likely be separated from family and be thrust into new settings, new jobs and a new culture. That adjustment is stressful enough on a relationship without the pressure of a huge financial commitment.”

The first step to buying a home with a boyfriend or girlfriend is to look into your state’s ownership laws. The laws vary from state to state, and they can take on many forms.

The most common forms of ownership are, sole ownership, joint tenancy, tenancy by the entireties, tenants in common and community property. Each of these types of ownership has different meaning and rules. The author states that a good option is tenants in common.

“Your first option, then, would be to consider taking title to the property as tenants in common. That way you delineate exactly what share you own in the event you split up. Obviously, however, there are other considerations that go along with this, so you should think of it as a no-brainer that you will first discuss this with an attorney in the state you're buying the home. For example, your boyfriend could sell his share to virtually anyone.”

Another option that could be considered is drafting a contract in advance that would designate who gets what in the event of a break up.

Then there is the domestic-partner agreement, which the author says could be a good choice for some people.

“Option two, similarly, is the increasingly popular domestic-partner agreement, where you also decide in advance who gets what, including property. This can also be used to spell out debt obligations: for example, who pays what household expenses, who uses what savings and checking accounts and who pays for insurance. To keep the breakup mess to a minimum, you can also agree in this document that you will go to arbitration, in the event a post-breakup dispute should arise. Realize that some state legal systems don't fully honor domestic partner agreements, while others honor them only in select counties.”

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