Watch Your Step
When mortgage precedes the marriage
Once considered shameful, cohabitation has gained greater respectability with each passing decade since the 1970s, says Andrew Cherlin, a Johns Hopkins University sociologist and an expert on marriage and divorce. Indeed, as he notes, many couples now buy a home together even before they become engaged.
These partners often assume they’ll marry soon after moving into the house they’ve purchased. But as Cherlin’s statistics show, that may not be the case. In fact, about half of all heterosexual couples who live together break up and never marry each other.
“A mortgage note is not equivalent to a marriage license – though many people think one automatically leads to the other,” says Mark Nash, a Coldwell Banker broker and author of several real estate books.
Nash tells about a couple in their early 40s who dated just a short while before the woman, an investment banker, began pressuring the man, a marketing manager, to buy a house with her. He soon acquiesced and they chose an elegant place from the 1920s, with a steeply pitched roof, dormer windows and built-in cabinetry.
“This was her storybook house. She’d hoped to get married in the back garden as soon as they finished their big home renovation, which cost $150,000,” Nash recalls.
But the wedding never happened. Just three years after they bought the vintage house, he ended their relationship. And because she couldn’t afford to buy out his equity, her dream house had to be sold.
Of course, many couples who buy homes together do eventually marry.
But neither partner should assume a home purchase will cement their ties, says Bryn Collins, a licensed psychologist and author of the book, “How to Recognize Emotional Unavailability and Make Healthier Relationship Choices.”
Collins believes an avoidance of commitment is now more common, especially among those born after the baby boom, which ended in 1964. She says younger couples are now more likely to postpone marriage and to buy a home together before they’re truly committed.
“They want to keep their options open on marriage for a long time,” Collins says.
She says unmarried couples should try to solidify their relationship before they buy a home. Here are three tips for those considering a premarital property purchase:
Make sure you’re on the same page emotionally.
Obviously there’s no guarantee any relationship will endure – even if the couple vows to stay together “till death do us part.” The high divorce rate underscores this reality. Yet as Cherlin says, the chances of breaking up are greater among those who live together than those who don’t.
Given the risk of a premarital breakup, Collins says it’s vitally important that couples try to determine if they’re compatible before proceeding to joint home ownership.
You don’t have to go to a therapist to find out if you’re a good match. Often you can obtain sound counseling at little or no cost through your church or synagogue. And in most cases, you needn’t be formally engaged to receive such services from a religious institution.
Another increasingly popular option involves couples’ classes and workshops. One organization that can help you find a relationship program in your area is Pairs (www.pairs.org).
Deal with money matters before hunting for a home to buy.
When romance is new, people tend to idealize each other and avoid hard questions about money matters. But Nash says you should have a frank and open discussion about your finances before you agree to buy property as an unmarried couple.
Obtain a legal agreement to protect you if your relationship falls through.
Buying a home with your significant other can have its financial advantages. In many housing markets, it can often take two salaries to support the mortgage payments. Therefore, if your income is limited, buying a home with your partner could hasten your entry into homeownership.
But what if the relationship that was supposed to last forever begins to flounder not long after you move into the property? That could lead to a very messy situation unless you have a contingency plan to handle a breakup should it occur.
Nash recommends you hire an attorney to draft an agreement specifying how the two of you would deal with the disposition of your property, should your cohabitation arrangement fall apart.
Like a prenuptial agreement, this document would address such matters as the terms of sale on your home and how the price would be set if one partner decides to buy out the other’s stake.
“Maybe after you’ve cohabitated for a while, you’ll get married and live happily ever after. But if life doesn’t work according to the script, having a legal agreement will let you handle your housing transition with less angst and expense,” Nash says.