Buying a home is such a huge first step into adulthood, especially when it comes to married couples who are looking to buy a home together but what does it look like for unmarried couples who are looking to buy? The number of unmarried couples in the U.S. has nearly tripled over the past twenty years. Just like any other person, they search for a decent place they can stay at for the best/cheapest offer possible. Yes, buying a home is a big milestone but it is easy to be intimidated by the prices especially since housing prices recently have not been seen to drop in the market. There is no need to fear though, there are some ways for these unmarried couples to help themselves out.
Most times when they look to buy a house, they usually depend on one or the other (depending on who makes more) to pay rent in order to help cover the mortgage. While this would work out well for everyone in the short-term, it is a little more risky because on their short budget. It would also be very difficult for them to keep the house without the help of one another. There is hope though! “unmarried couples buying a home together can benefit from greater flexibility when applying for a mortgage” said Bill Banfield, executive vice president of capital markets at Rocket Mortgage. The buyer who is more qualified can be the only one on the mortgage and this could result in a favorable interest rate and mortgage terms if the other partner has a low credit score. Lenders will also let both partners apply for the mortgage together allowing incomes and debts to be combined.
Unmarried couples can help themselves a little bit by using the lowest of FICO scores among one another. Applying together could allow the couple to borrow more, depending on their financial situation which is a really helpful resource since most new home buyers are on a tight budget. Another benefit for unmarried buyers are the tax benefits that they can receive. The couple will have the “ability to bunch itemized deductions on one person’s tax return and take the standard deduction on the partner’s tax return, leading to maximize deductions for the couple over and above what they could claim as a married couple,” resulting in maximum tax savings according to Alexandra Demosthenes, a certified public accountant and financial planner in Boca Raton, Fla.
So overall, if you are a unmarried couple looking to buy a home together, there is not a big reason to be intimated. There are ways to help yourself and bring the prices down! The hacks i provided in this blog are only a few ways to go about lowering the cost. If this post applies to you, you should definitely look into more house hacks for the best prices.