Reasons to Buy a House with Someone Other than Your Romantic Partner

Two women hugging each other

With so much uncertainty around the Real Estate market and home prices fluctuating constantly, finding housing that is affordable can feel challenging for many.  For this reason, more and more people are exploring buying a house in partnership with a friend, sibling, or cousin – not just a romantic partner. This can be an excellent choice financially and could create more housing options that allow you to build equity in a property that generally appreciates over time. 

Shared housing can be a fantastic option for people with unconventional housing needs since it offers big financial perks and the empowerment of being a homeowner. Why consider buying a house with a non-romantic partner or spouse? There are many reasons aside from being single! Even people who are in romantic relationships may not feel ready to take the big step of co-homeownership with their romantic partners, yet still want to enjoy home ownership and the many benefits that come with it.

Why Should You Buy A House With A Friend, Cousin, Or Sibling?


No Need For any Commitment

Attached? You and your current romantic partner might not be on the same page about buying a house, or you may not be completely sure if they are the right person to make this huge financial decision with. Buying a house together may not be a good idea if you are unsure of your long-term future. However, that shouldn’t stop you from being independent in your decision making. If you feel like you are ready to buy a house, consider involving a friend, sibling, or other family member in the process. Living with someone other than your partner can teach you the dos and don’ts of being a homeowner, making things easier in the future.


Easier to Qualify for Home Mortgage

Acquiring the best home loan is perhaps one of the most difficult aspects of buying a home. Banks and other financial institutions take a detailed look at your income, wealth, current debt, and credit score as they evaluate what type of home you can afford.

For the buyer’s protection, there are minimum loan requirements in place which vary greatly based on the loan program you choose. When two people sign the mortgage application, the chances of meeting all the requirements and qualifying for the loan typically increase.


Divide Monthly Expenses

Does the thought of being responsible for paying monthly utilities, mortgage, repairs, and maintenance on your own feel overwhelming? You’re not alone! By dealing with the navigation of those expenses with a co-owner and sharing the responsibility for payment, you can cut down on a ton of stress! 

Sharing expenses can help you quickly increase your savings, which you can use to pay off the mortgage, save for later, or invest back into your property. Make sure to discuss with your friend, sibling, cousin, etc., how you both plan to split the expenses and which method is the fairest.

Enter the Market Sooner

By pooling the deposit funds together, you can break into the market much sooner than if you had to save the whole deposit amount by yourself. This allows you to benefit from capital growth sooner and avoid paying more for a house if you have decided to wait a year or two.


Home Equity for All

The longer you and your housemate cohabitate and pay off the mortgage together, the more home equity you create. Equity is the difference between your property’s value and your liability to the mortgage lender. 

If you are being realistic, you will know that parting ways with your housemate will likely be inevitable. Unlike renting, property ownership allows you to walk away with a lot of money. This way, you both can divide the proceeds from the house and use the money however you please.


Take Advantage of Tax Benefits

When you co-own a house, the interest you pay on the mortgage becomes tax deductible. However, it is important to remember that the amount of interest you each subtract must total the interest paid on loan that year. It should not be more or less.


Things to do Before Getting a House Together

  • Analyze each other’s income, assets, and credit scores to better understand how likely you both can qualify for a good mortgage rate. 
  • Create an operating agreement that clearly states the monthly and yearly expenses, such as real estate taxes, utility bills, insurance premiums, and maintenance costs (snow shoveling, landscaping, etc.)
  • Discuss financial inequities. For example, what to do if one of you is contributing more towards the initial deposit amount? Will they get the same back when selling the house, or will it be adjusted to match the equity gain? Similarly, what to do if one party pays more of the mortgage? Will they have a higher share in the sale value of the house? These are the discussions you need to have before finalizing the purchase. 
  • Hire a lawyer to draft a cohabitation agreement that clearly states important details, including the type of ownership, how you both will pay the daily expenses, and what needs to be done in case either party exits the agreement. 
  • Prepare for unexpected expenses and scenarios, such as a job loss. Decide how you plan to afford your mortgage payment in such an instance. Speak with an insurance company to discuss different plans if the worst happens. If you don’t have a plan, make sure to inform your mortgage lender immediately that you cannot make the payment. Sitting back and ignoring the problem may put you at a higher risk of default. 
  • Talk about future relationships. What happens when one of you becomes involved in a committed relationship? Will their partner be able to move in? Similarly, what happens when the relationship becomes long-term and is legally considered a de facto relationship? In such a case, what part of the property will be given to their partner, and how will this affect you? 
  • Always be open and honest. Discuss your goals, concerns, and expectations from the big move, and continue communicating.


Final Thoughts

Buying a house with a friend or family member may be an excellent decision for numerous reasons. Not only does it give you a sense of freedom and empowerment, but it also teaches valuable life lessons and helps you build equity. But to make this move successful, you need to do your homework and contact a professional to help find you the best property.