Before you buy a home with your partner you want to ensure that your interests are protected and that of your children and future children?
Well, you definitely don’t want to skip this blog because as a previous law clerk for 8 years I am going to break down the top things you MUST know to protect your interest when purchasing a property.
You will definitely want to stick to the end where I am going to tell you the most important consideration when purchasing a property.
Outlining Rights and Responsibilities
The first consideration when buying a home with your partner is to ensure that you speak with professionals such as a lawyer. Lawyers will outline the specifics regarding responsibilities and rights including any hypothetical that may arise. In a perfect world there would be no issues in the future but we must prepare for what we do not foresee happening.
Be sure to discuss and have in writing an agreement that outlines the financial obligations of all parties. This should include what steps should be taken should a breakdown of the relationship occur.
For example, in the event of a breakdown of the relationship and one party wanting to break the mortgage. You should consider who will be responsible for any penalties. Having these items agreed upon in writing will save you a million headaches down the road.
Type of Ownership
Another consideration to discuss with your lawyer is how you are taking title of the property.
There are generally two ways to take title – joint tenants or tenants in common. With joint tenants the title is transferable. This means that should one owner pass away the title and full interest will pass to the surviving owner.
This type of ownership is common with married couples – however we will discuss this further in a moment. Tenants in common is where each title holder keeps their interest in the property.
For example if there are two owners on title as tenants in common and both owners hold 50% interest in the property. Should owner number 1 pass away their 50% interest of the property passes down to their estate, not the other owner.
This is the best way to take title when you are purchasing property with someone else. You can even determine the percentage of ownership.
For example if one person only puts down 30% of the deposit that owner can own 30% interest in the property and the other owner can hold the remaining 70%
Most Important When Buying A Home
Okay guys we are nearing the end of this blog and this is definitely one of the, if not THE most important consideration when purchasing a property.
Many people think that when you get married the best and only option to take title with your spouse is joint tenants, however take this scenario into consideration.
Imagine if a husband-to-be was previously married or had children from a previous marriage. The husband-to-be now gets married and buys a home taking title as joint tenants with his new wife.
Now if you recall taking title as a joint tenant stipulates that should one person on title the full ownership transfers to the other owner or owners.
So let’s imagine that after some time that husband passes away and the new wife is now the full owner of the property. Should the wife in the future remarry and add her new husband on title as a joint tenant there is no interest in that property to be passed down to the first husband’s children or family.
In these cases it’s best to speak with your lawyer about the options of taking a 50/50 tenant in common title ownership and preparing a will that will indicate precisely how you would like your estate to be handled.
Wills are not just necessary in this circumstance, but in every situation having a will prepared is essential to protecting your interest.
Now that you learned top things you MUST know to protect your interest when buying a home with your partner. You may be interested in learning more about what you need to know before purchasing a property with someone else.
In our next blog we will discuss things that many people don’t know before they decide to purchase a property with someone else whether that be a friend or family member
Are you thinking of purchasing a property with your significant other but you have questions and want to make sure that your interests are protected, definitely give us a call, we have a property group with the best of the best professionals in the game that are here to help protect you! Contact us! Until the next time!