Mortgage Advice & Options for Un-Married Couples

Mortgage Advice & Options for Un-Married Couples

It probably comes as no big surprise when it comes to the housing market, the younger generations make up a large percentage of home buyers.

The following statistics from the National Association of REALTORS® Research Group April 2022 Report prove that to be true ...

• The typical first-time homebuyer is someone in their mid-30s 
• First-time buyers made up 26% of purchases made
• At 22%, the primary reason for purchasing a home was the desire to own a home of their own. For first-time buyers, this number jumps to 62%

But what caught my eye, in particular, is the significant percentage of homes reported as being purchased by buyers that are unmarried couples.

• Among first-time buyers, 18% of buyers were unmarried couples, and 5% were other household compositions. Both are the highest shares recorded
• Supporting statistics from a recent Coldwell Banker Marriage and Homebuying Study show that "home" is the new engagement ring: 82% of unmarried Americans surveyed, including 85% of females who aren’t married, would rather invest in a home than pay for a big expensive wedding

My own client database certainly backs up these reported statistics ...  

The number of calls and inquiries I received from unmarried couples (and single homebuyers) has grown over the last few years.  I have found that despite the additional concerns sometimes confronting young unmarried couples when buying a home, they are choosing to buy homes together in larger and larger numbers.  

What advantages to homebuying are compelling young unmarried couples to take this action?

• Buying with someone, regardless of marital status, improves home affordability
• With rent costs on the rise, 2 incomes expand the opportunity to buy a home
• 2 incomes expand the opportunity to save a downpayment
• 2 Credit Reports and 2 sets of Credit Scores can be considered for Mortgage Application
• The likelihood of being approved for a mortgage and a larger monthly payment is typically greater
• There is a joint responsibility for expenses such as utilities, etc.

But there are some challenges to buying in this manner too ...  

So with so much on the line, it's vitally important that anyone considering this type of home purchase educate and protect themselves.  A long honest conversation between all parties involved is called for before taking any action, before signing any contract to buy or applying for mortgage financing. 

What should be discussed?  

These issues should be discussed and/or resolved ahead of time:

• Credit and Financial Health  (Credit Scores directly influence mortgage options, interest rates, borrowing capabilities, etc.  Be upfront and honest, as all will be revealed at the time of mortgage application. Go to www.annualcreditreport.com to receive a free credit report)
• What percentage of the house each party owns
• What happens if the friendship/relationship dissolves?
• What happens if the couple marries?
• What if someone dies? (Who receives their share of the home?) 
• What if someone becomes disabled?
• What if one of the parties wants "out"? 
• Who and how is mortgage financing applied for?  
• How are monthly costs and responsibilities to be split?
• Who claims real estate tax benefits?
• How are needed repairs covered?  And by whom?
• Who sees that the monthly mortgage payment is made?
• How are disputes resolved?
• How and Who will you hold title to the property?  (Options may vary depending on the state you live in, but options are typically: Joint Tenancy, Tenants in Common)  
• More ...

As uncomfortable as broaching the topic may seem, it's wise to consider undertaking a legal contract between parties ... a "prenup" if you will ... before starting the home-buying or financing process.  Rules and actions for all parties involved in the purchase are resolved ahead of time this way and everyone involved is protected. 

Then after these actions have been taken you can begin your home-buying journey with peace of mind and knowing you are well-protected.  Your lender will be able to review and find your best financing options.

If you are ready to take these home buying steps anywhere in the Lincoln-Way Area, Chicagoland area, Illinois, and Wisconsin, reach out to me today @ www.genemundt.com.  

Together, we'll research all your mortgage options and decide which serves your needs best moving forward. And, as always, I suggest that my customers consult legal advice for all matters real estate related (understanding that NOT ALL transactions or states require or involve attorneys). 

* Hoping to buy or refinance a home or investment property in New Lenox - Will County or elsewhere in the Chicagoland - IL - WI area?

Contact me today. I'll put my 40+ years of mortgage experience hard to work on your behalf.
I'm easily found at:

Gene Mundt

Mortgage Lender - NMLS #216987 - IL Lic. #0006220 - WI Licensed

American Portfolio Mortgage Corp.

NMLS #175656

Direct: 815.524.2280

Cell/Text: 708.921.6331

eFax: 815.524.2281

gmundt@goapmc.com

www.genemundt.com

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking: Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:

The Lincoln-Way Area, Will County, (New Lenox, Frankfort,

Mokena, Manhattan, Frankfort Square, Joliet, Shorewood, Elwood, Lockport, Wilmington, Crest Hill, Symerton, Braidwood, Channahon, University Park, Beecher, Plainfield, Bolingbrook, Romeoville, Tinley Park, Homer Glen, Crete, Peotone, Naperville, etc.), DuPage County, Kane County, Grundy County, the City of Chicago, Cook County, and elsewhere within IL & WI.

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