Buying as a couple, whether married or unmarried, takes a lot of planning. Sharing a property means also sharing the responsibility, so there are a lot of decisions that need to be made before you start the process.
Being clear about how you both want to proceed and what you both want out of the house will avoid any drama (legally or emotionally) down the line.
Here are 10 questions you should pose to each other before you decide to buy together:
What kind of property do you want?
The first step in deciding you want to buy a home is knowing where you want to live. And, if you’re moving with your partner, you need to agree on what you both want.
You should first consider the location you want to move to. Do you want to stay nearby to where you are now or move somewhere more affordable or closer to work/family?
Once you’ve chosen a location, you’ll need to look at what kind of properties are available and get together a list of your must haves. Do you need a house or a flat? Do you want a garden? Is a new build preferable or an older property? If you both have different expectations, try to meet in the middle, so you're looking for something that gives you both a little of what you want.
What can you afford?
Once you know where you want to buy and what kind of property you are looking for, it's time to look at what you can actually afford. If you are both in work, you should have two incomes to pull from – as well as whatever savings you each have. Combine this money and see what you have to put towards a mortgage deposit.
However, you must remember that a deposit is only part of the puzzle when buying a house. There’s lots of extra costs involved, such as stamp duty, conveyancing, and removal fees that you will need to budget for as well. Our Moving Cost Calculator can help you get a sense of how much you will need.
You should also look at your combined monthly income. Think about what you’ll be able to afford in terms of ongoing fees once you’ve moved in, such as utilities and mortgage repayments.
What are your ownership options?
There are two main options available when it comes to buying with another person, Joint Tenancy and Tenancy in Common.
Joint Tenancy is where you both together own 100% of the property and not a part of it each. This means you must act together as if you are one owner, and neither one of you can sell of your portion of the property to someone else. If, heaven forbid, one of you died then the other would become the sole owner. This type of ownership is typically taken by those who are married or on civil partnerships, because of the legal feeling of a union, but is not limited to just those people and they can also choose not to go down this route.
Tenancy in common is where you each own your own sperate share of the house. These shares do not have to split equally, for example one of you could own 70% of the house and the other 30%. These shares can be passed on in a will to whoever the owner likes but once again you cannot sell the house without both owner’s agreement.
Another option would be to have just one of you own the property. This will require a lot of trust within the relationship, as whichever one of you is not an owner will not have a legal right to any of the home and could easily end up with nowhere to live if things in the relationship took a turn.
Who will apply for the mortgage?
While it may be possible for just one of you to apply for the mortgage on a jointly owned property, you will likely be expected – or at least advised – to take out a joint mortgage.
A joint mortgage allows you to combine your savings and income to pay for a deposit and you will be repaying a portion each. Having 2 sets of incomes to apply for a mortgage with means that you should be able to afford a larger deposit and generally will result in a lower interest rate, saving you both money in the long run.
Before applying for your joint mortgage, remember to get all the necessary paperwork together and check both your credit scores. As you are both financially responsible for the mortgage, if one of you has a credit score issue it will affect the other’s score too.
We always recommend using a mortgage broker to help you find and apply for a mortgage. They can give you their expert advice and guide you through the process. You can also get free mortgage advice from Mortgage Advice Bureau via reallymoving.
Who will be on the deed?
It is useful to be aware that no matter who pays for the mortgage, whether it's one or both of you, the type of ownership you go for will determine whose name is on the deed. With both Joint Ownership and Tenancy in Common, both owners’ names will be on the title deed.
Being on the title deed of a home means that HM Land Revenue has a record that you own the property. Deeds hold important information such as previous owners and legal stipulations about the home, so it’s important to keep hold of them. However, HM Land Revenue do keep copies on file digitally if you do not have the original paper copy of the deed.
How will you divide up expenses?
The cost of buying a property doesn’t stop once you move in. There are many ongoing expenses that come with owning property, including mortgage repayments, utility bills and council tax. Make sure you research what you will need to be paying as homeowners.
Before you buy it's helpful to come to an agreement on how you will pay these expenses as a couple. Will you divide each one in half, or will you each take responsibility for certain bills?
Do you need a legal agreement of trust?
It may be important for you to make sure everything you agree to is set down in writing, so you can be clear on who is responsible for what in terms of the property.
If this is indeed important to you, you can sign a Deed of Trust (sometimes known as a Declaration of Trust). This deed will outline how much money each of you is putting into the property, as well as a written agreement on what happens under certain circumstances, such as if one of you cannot pay the mortgage or you both decide to sell the property.
What if your circumstances change?
Life doesn’t always go as smoothly as we expect, especially when it comes to money. Even though you have decided how you’ll divide all the expenses, it is important you plan for the possibility of a change to your income.
For example, if one of you were to lose your job, would the other be able to take on some of the payments until they can find a new career? Or would you be able to get a loan, whether from a bank or from friends and family, to keep up with payments.
There may also be a change in your life that requires more of your income to be paid elsewhere. For example, you may unexpectedly have a baby on the way, or a family member may suddenly need some kind of care after an illness or an accident.
Because you won’t know what life will throw at you, especially when there are two lives in this venture, it’s important to leave some wiggle room for unexpected financial changes when you choose your mortgage and look at bills.
What if you break up?
It’s not nice to think about, but sadly relationship don’t always last forever and when going into a big financial commitment like owning property, it’s important to be practical about all possible eventualities, so you don’t end up with more difficulties.
Think about whether one or both of you would want to continue living in the house, or if you’d prefer to sell and both move on. Remember Joint Tenancy and Tenancy in Common both require you to agree on selling the property, or part of it in TIC’s case. Your Deed of Trust can set out all eventualities of selling in a breakup so try and think about this before you sign one.
One key question to ask when buying any property is what you want to do with it, or to put it another way, how long do you want to stay?
Something to figure out before you buy is whether this will be your ‘forever home’, where you will settle down and spend your life together or if it will be a stepping stone to get on the ladder and move on to your dream home later. This decision may depend on what type of property you can find/afford at the time you are buying.
For example, if you plan on starting a family but can only afford a 1 bed flat, then this may change your intentions for your home. It may then become a stepping stone to eventually upscale to a house with more room.