Mortgage before Marriage: What You Need to Know

According to recent statistics, one out of every four young couples purchased a house together before they were married. Since owning a property is another sign of true commitment, this can indeed be an attractive option.

Unfortunately, there are still several pitfalls to avoid and a handful of excellent tips to remember to ensure that you and your significant other begin in the right direction. Let us have a brief look at some of the most relevant:

Mortgage & Marriage

Credit Scores

Any couple that decides to invest in a joint mortgage must first be aware of each other’s credit score. Even if one has a high score, a lower number associated with the co-owner can affect the amount of the loan, as well as the interest rate. If the one with the highest score opt for a mortgage, the lender may not provide a figure as high as that which could be supplied to a couple.

Title Concerns

There are three specific ways in which an unmarried couple can hold a title. First, the two can be equal partners and share equal legal rights. However, there is also the possibility of obtaining a title as joint tenants or tenants in common. Each will have unique legal ramifications. In the case of equal partnership, both individuals will have equal access to the property and should they decide to separate in the future, distribution rights can be tricky. This is similar to the concept of joint tenants. Tenants in common are slightly different, for each party will be able to determine the percentage of the property that they legally own.

Consult with a Real Estate Attorney

It is wise to utilize the expertise of a trained real estate or planning attorney. Their primary job is to make sure that all of your “bases are covered” in terms of any possible outcomes that may develop. For instance, you and your partner may eventually want to sell the home and purchase a house and lot for sale in Manila or somewhere else in the Philippines or even elsewhere in the world. Or, there is always the unfortunate situation when a divorce occurs. Should all legal obligations not be made clear from the onset, transactions can prove to be confusing and expensive. Having a legal agreement in place long before the proverbial knot is tied can enable both partners to remain assured that their interests will be looked after down the line. We suggest that you dive deeper into the subject of conjugal property issues, regardless how much you believe you will live together happily ever after.

Financial Responsibility

We should always remember that any property is a very real investment. Both partners need to keep track of exactly what they individually bought and paid for. This is necessary for any future agreements and in many ways can minimize the possibility of finance-related disagreements. One of the best ways to be responsible is to try a transparent record keeping of bills.

Owning a house is a great way to show your partner how committed you are to a mutual future. Still, a little planning can go a long way. Remembering these suggestions will help to assure that starting off on the right foot is better together.