The Mortgage Advice & Options Un-Married Couples Need to Know

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI
https://activerain.com/droplet/5lWR

 

 

The Mortgage Advice & Options
Un-Married Couples Need to Know

 

 

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

 

The following statistics from the National Association of REALTORS® Research Group April 2019 Report proves that to be true ...

  • Millennials made up the largest share of home buyers at 37%. (Breakdown:  Older Millennials (Ages 29 yrs to 38 yrs) made up 26%.  Younger Millennials (Ages 21 yrs to 28 yrs) made up 11% of the shares reported)
  • 86% of Younger Millennials and 52% of Older Millennials were first-time homebuyers


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

 

  • 8% of those homebuyers reported in the NAR Report were unmarried couples.  The highest share of unmarried couples being found in the 28 years of age and younger age group.
  • Supporting statistics from a recent Coldwell Banker Marriage and Homebuying Study show that 25% of Millennials purchased their home with their current spouse prior to being married.  (That number has grown rapidly, as in 2015 only 1 in 5 buyers were unmarried couples) 

 

My own client database backs-up these reported statistics.  The number of calls and inquiries I've 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 found in homebuying are compelling young unmarried couples to take this action in larger number?

  • 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 ...  

 

There are differences in HOW un-married couples must complete a mortgage application versus those of their married counterparts.  While simply addressed, those differences must be thoroughly explained by a lender and then equally considered by un-married mortgage applicants.  

 

But beyond those more "mechanical" differences in application and process, there are other considerations it is wise to proactively address by those considering purchasing and financing in this manner.

 

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

 

It is my recommendation to my clients hoping to buy in this manner, that they secure the services of a real estate attorney at this time.  It is a sound decision and action to take. 

 

An experienced knowledgable real estate attorney will help the buyers navigate all the issues specific to this type of home purchase.  Then they will assist them in taking actions to protect themselves.

 

What should be discussed at this time?  

 

It is suggested that 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 completely 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, but options are typically:  Joint TenancyTenants 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 Chicagoland area - or 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
 
 
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  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, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

 

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. M.C. Dwyer 01/17/2020 10:39 AM
  2. Roy Kelley 02/10/2020 01:00 AM
Topic:
Home Buying
Location:
Illinois Will County New Lenox
Groups:
Mortgages
Chicago Area Real Estate BUZZ!
1st Time Buyers
Bananatude
WillCounty
Tags:
mortgage advice
mortgage options
homebuying advice
homebuying education
unmarried home buyers
unmarried mortgage holders
legal protections

Spam prevention
Show All Comments
Rainmaker
3,100,305
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

Perhaps my largest segment of new buyers are unmarried couples. I can also tell you an increasing flow of listings comes from unmarried couples who bought a home, had no plan, no agreement an dthen broke up. 

Jan 16, 2020 06:12 AM #15
Rainmaker
3,508,251
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Gene - understanding the different segments of the buyer pool and the financing that is available to all helps make a better real estate professional.  Nicely done.  

Jan 16, 2020 06:30 AM #16
Rainmaker
2,514,229
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

This posting is like having a magic mortgage lamp and you rub it and out comes Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi ...giving you 3 loan options all good

Jan 16, 2020 01:47 PM #17
Rainmaker
100,152
Jerry Thomas-Construction Loans
Cranbrook Loans - Farmington Hills, MI
Construction Loans in MI, OH, VA, GA, FL and AL

Great information, espcially how to hold title.

Jan 16, 2020 05:42 PM #18
Ambassador
4,125,981
Jeff Dowler, CRS
eXp Realty of California - Carlsbad, CA
The Southern California Relocation Dude

Hi Gene:

This is such an informative post for unmarried couples and one they should read before they get too far along. Title is a big issue that needs to be addressed, your list of other issues to be addressed is a terrific help.

Jeff

Jan 16, 2020 05:55 PM #19
Rainmaker
493,173
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Thank you for writing this informative post geared toward Millennials and especially unmarried couples.  The main message is to do your research and have the "hard" conversations "before" you start shopping for as home.

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi since you work Wisconsin and Illinois we should get together for a cup of coffee sometime.  I already work with a number of lenders but I always appreciate your informative blogs and want to "think of you" when I am working with a buyer needing expert advise. Let me know if you are ever in the Kenosha area and we will meet-up for coffee!

Jan 16, 2020 06:13 PM #20
Rainmaker
1,578,984
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Such good advice - Any time unmarried people make any kind of purchase together they should think through all of those questions, and have a written agreement to address them.

I think it's especially important in a love relationship - even more emotions are involved.

Jan 16, 2020 08:29 PM #21
Rainmaker
184,874
Eva B. Liland Century 21 Doug Anderson
Century 21 Doug Anderson - Lancaster, CA
Glad to be of Service 661-714-1643

With home prices going up and up, I can see more people trying to find a way to share expenses with someone in a similar situation. Those are some serious questions for the buyers to answer before getting in too deep Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi .

Jan 16, 2020 08:33 PM #22
Rainer
488,309
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

There's no commitment with unmarried couples so I advise against any large purchase  especially real estate and to remain in control of your assets without odious terms and conditions. 

Jan 16, 2020 11:16 PM #23
Rainer
291,496
Ron Aguilar
Continental Mortgage - Saint George, UT
Mortgage & Real Estate Advisor since 1995

Excellent topic to discuss and very timely in our present. Since 1995 as a Mortgage Loan officer I have offered all my first time home buyers which are usually younger buyer way before the Millenials were born, free tax preparation. This allows me to have that conversation with them about getting your finances etc in position to buy a home. 

Jan 17, 2020 06:57 AM #24
Rainmaker
698,121
Laura Filip
Laura Filip Broker , Opening doors for All Seasons of Life - Whitesboro, TX
What can we do for you today?

This is a wonderful topic to discuss. One must think about all the options to obtain a mortgage on a home. What works best for each group. Visiting with an experienced loan officer is very important. I highly recommend speaking to someone trusted. 

Jan 17, 2020 07:33 AM #25
Rainer
230,292
Greg Mona
Revelation Real Estate - Chandler, AZ
Professional Real Estate Representation for YOU!

 This is great information the have, Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi.  I honestly was surprised at these numbers, but then when I stopped to think about it, it does seem to reflect the current market among millenials. Thank you for sharing these interesting statistics and the recommendations to go along with them.  

Jan 17, 2020 08:56 AM #26
Rainmaker
392,392
M.C. Dwyer
Century 21 Showcase REALTORs - Felton, CA
MC Dwyer-Santa Cruz Mountains Property Specialist

This is such a great blog post Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi        

May I reblog this? 

Out here in California, average home prices in Santa Cruz, the Silicon Valley and San Francisco are between $1 million and $1.75 million,   I have a LOT of buyers who aren't married and I bring up these same points for them to figure out together.

 

Jan 17, 2020 09:05 AM #27
Rainmaker
3,883,336
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good afternoon Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi ,

Congratulations on a well deserved feature post! An informative post to help buyers who are thinking of making a home purchase and all the options one available.

Jan 17, 2020 10:15 AM #28
Rainmaker
559,463
Rob Spinosa
Guaranteed Rate, Marin County, CA - San Anselmo, CA
SVP of Mortgage Lending, Marin County

Great post.  We see a lot of this too in CA, so my experience echoes yours.  With the high cost of living in many coastal areas, it's really a challenge for a single, younger buyer to go it alone. 

Jan 18, 2020 05:03 AM #29
Rainmaker
1,317,363
Sheri Sperry - MCNE®
Coldwell Banker Residential Brokerage - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

HI Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi - Great article and so worthy of a feature!  I really do not think that most people would think of all the scenarios that you have covered with your questions.  

Another reason why an experienced mortgage professional such as yourself is needed to help guide people who do not fit into a conventional relationship for the purpose of a mortgage or homeownership. 

Jan 18, 2020 07:16 AM #30
Ambassador
1,953,017
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

We often see this type of scenario with our multi-gen homes. How to protect all parties, who is going to be on title? It's complicated and so important to get the questions of "what if" hammered out prior to the purchase. Most of the millennial we deal with in our business are purchasing with a mom, or dad, or both.  This segment of the population is a huge demographic and we all need to better understand how to service them. 

Jan 18, 2020 07:45 AM #31
Rainmaker
511,328
Robert L. Brown
www.mrbrownsellsgr.com - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Mic

Unmarried couples NEED to read this post. So many pitfalls that can make the best relationship go south. Everything is "all'' good until the relationship sours and one or the other parties wants out OR they want their money back. It's not that easy. Great post.

Jan 20, 2020 04:41 PM #32
Rainmaker
993,980
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Excellent information for anyone new to the home buying market.  I get to have these conversations and regularly refer them to annualcreditreport.com to view their credit.  Managing expectations helps them to understand the process.  

Jan 23, 2020 03:11 PM #33
Rainmaker
5,619,113
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is excellent advice to share with prospective home buyers.

Feb 09, 2020 09:54 AM #34
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Rainmaker
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

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