Buy Alone or Buy Together?

Did you know that marriage is becoming less popular? With this has come an increase in cohabitation between partners, and even friends going in on homes together. You may be wondering whether or not it is wise to buy a house with your significant other (or even best friend!). Here are the pros and cons of buying together.

Pros of Buying Together

1.Splitting Expenses

This is the most obvious advantage to buying a home together. It’s much easier to become a homeowner when you have two incomes going in on the down payment, and the mortgage is much more manageable with two incomes as well. You also get to split all the additional expenses that come with a home. Utilities, electric, internet payments…you name it, you get to split it.

2. Easier to qualify for a mortgage

It’s harder to qualify for a mortgage when you only have one income recorded. You’ll have an easier time working with lenders with two working individuals.

3. You both build equity

This is especially important to note if you are going in on a home with a friend or cousin. In these scenarios, you know that eventually you will part ways. Even so, buying a home together may be beneficial (rather than renting together) so that when it is time to go your separate ways, you have both built equity.

4. Enjoy tax breaks

If you wait to buy a home together until you get married, you won’t enjoy the tax breaks that come with homeownership. Buy now – and you both get to have these tax benefits.

5. Make the transition to marriage easier

When you buy a home together before getting married, you don’t have to worry about as many details after getting married. There are so many other details to take care of with the wedding, honeymoon, name changes…if you deal with housing beforehand, you might be less stressed out when the wedding rolls around.

Cons of Buying Together

1.Can add stress to relationships

Living together is a big step for any relationship – romantic or otherwise. Add to this co-ownership and the stress of being involved in such a large financial decision together…that much pressure can be difficult for a relationship. If you’re not confident in the foundation of your friendship or partnership, it might be best not to rock the boat by going in on such a weighty financial decision together.

2. Makes it more difficult to walk away

Buying a home together requires a deep level of commitment relationally and a lot of work logistically. If things go south in your relationship, being on the title of a home and on the mortgage papers together make it a lot more difficult to peacefully (and simply) end things. Additionally, if you have ever been concerned about your partner being emotionally (or otherwise) manipulative/abusive in any way, co-owning a home can stick you in an unhealthy relationship for far too long.

3. You’re dependent on them financially

If your friend or partner’s financial situation suddenly changes – you are liable for all their missed payments. You need to think very hard before linking your livelihood to the income of another person – especially if you don’t have a confident reason to believe that they can maintain a steady income.

4. Lowest credit score determines mortgage

This is a major determining factor that most people realize. Lenders aren’t going to assume the best-case scenario, so they determine mortgage rates based on the lowest credit score out of the two of you. Depending on who you’re going in on a house with, you might have better luck owning by yourself and collecting rent from a friend to keep the mortgage low.

While buying a home together does provide certain financial positives and conveniences, there are a lot of relational stressors that should be considered before making this weighty decision together with anyone – whether they be a partner or a long-time friend. At the end of the day, you have to objectively base this decision on the quality of your relational strength and the reliability of your friend/partner’s financial situation.

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