Pros and Cons of Getting a House Before You’re Married
Buying a house is an extremely exciting life milestone, whether you are doing it with your spouse or before you are married. Nowadays, an increasing number of couples are purchasing houses together before getting married. Some do it to save money on rent and other utilities, while others want to build equity earlier without waiting to be married.
Your marital status can significantly impact whether you buy a property individually or as a co-owner, as well as how you choose to hold the home’s title. There are many factors to consider as you weigh the pros and cons of buying a house before getting married; some of the main considerations are below to help you navigate through!
Pros of Buying a House Before Marriage
Significant Savings
Rent is expensive and can eat up most of your monthly income. With rental prices increasing by 3% to 5% per year on average, higher monthly expenses are inevitable. Living apart means that you and your partner will pay separate rent and living expenses; when you decide to get a house together, however, you can potentially save hundreds of dollars each month by sharing in the costs of living at one residence.
Build Equity Early On
Equity is part of your home’s value that you own completely, and it increases as you pay off your mortgage and as your property appreciates. Equity enables you to be financially secure, and is valuable if you ever borrow money and leverage your house as collateral. If and when you ultimately sell your house, you can keep any equity you’ve created over the years.
If you know that you and your partner are in it for the long haul, getting a house before marriage enables you to build equity sooner. The longer you wait, the more expensive it will become to buy a property later.
Co-signing could be Beneficial for Pre-approval
If you and your partner are planning on buying a property together before marriage, you may benefit from a lower interest rate and enjoy more ease in the loan pre-approval process. A co-signer agrees to take responsibility for the mortgage with you and will be held accountable if your loan defaults.
Be sure to discuss your finances with your partner and understand if they are financially stable enough to be a co-signer. You can also pick someone else to be your co-signer – decide wisely since their credit score will be on the line.
Double Income to Divide Monthly Expenses
If you and your significant other are both working, you will benefit from two income streams that can be used to pay off one monthly mortgage payment. This can help you ensure that your property costs are manageable and also help you create equity faster.
However, this will also mean dividing other expenses such as groceries and utilities. Keep in mind that your financial circumstances may change over time, so it might be a good idea to regularly check in on your budget together.
Cons of Buying a House Before Marriage
Potential Financial Predicament
One of the main drawbacks of getting a house with your partner before marriage is that it could result in a serious financial dilemma. If you aren’t careful in the planning process, you may end up taking on more financial burden than you can handle. Not only will this hurt your financial stability, but it will also hurt your relationship with your partner if things go south.
If you are not ready to share your finances, waiting until you are married may be better. But if you both are on the same page, avoiding financial entanglement shouldn’t be too difficult.
Time Commitment
Getting a house before marriage might be a big mistake if you do not see yourself with your current partner long term. You will have to be completely honest about your intentions and decide if you are getting the house for the right reasons. If you are on the fence, it is always good to wait.
Lost Tax Benefits
Buying a house before marriage means you won’t be able to benefit from the tax perks of house ownership. For instance, you will not be able to subtract your mortgage interest expense from your taxes. Think about both your and your partner’s long-term goals and make sure that getting a house is in line with those goals.
No Legal Protocol for the Division of Equity
When unmarried, there is no protocol for fairly dividing the assets during a breakup. This might lead to complications when you share joint ownership of a home. Although an awkward topic, discussing a hypothetical breakup situation with your partner is important to ensure you both are on the same page and what would happen if you split paths. If the idea scares you, it may be better to wait a while and see how your relationship progresses.
Final Thoughts
Buying a house before marriage is becoming more common as couples look to live in a financially savvy way while starting a new chapter together. While there are a lot of advantages to making this move, there are certain risks that you need to be aware of. To make this move successful in the long term, discuss each financial and non-financial aspect with your partner and ensure you both are fully ready and willing to commit to the investment.
