Should unmarried partners buy a house?

There are definite benefits to buying a house together. The primary benefit is that you'll likely qualify for a larger mortgage together than you would separately. Joint ownership is a great way for two people to pool their resources and buy a house.

There are some dangers in joint ownership that you need to be aware of, and decisions you need to make before moving forward.

The most important, and probably most unpleasant, is deciding what will happen to the house and the mortgage if you split up. This decision should be made before you sign any paperwork or look at houses. Otherwise you could find yourself in deep legal and/or financial trouble.

You should be aware that lenders require each borrower to have full responsibility for the entire mortgage debt. If your partner refuses to pay, you are still responsible for the full payments and liability.

Some States have different options for how unmarried partners hold title (called Tenants in Common).

One option if you break up is to sell the house. This is the easiest way to relieve both parties of their financial obligations to each other. If one person chooses to stay in the house, the person who's leaving may need to be compensated for the money he or she has paid toward the downpayment, mortgage and other expenses, and may want to be taken off of the mortgage loan. This would require the mortgage lender's approval or a refinancing of the mortgage. You also may decide to "buy out" your partner by paying him or her their share of the increased value of the house since it was purchased and taking sole title to the house.

Whatever agreement you come to, put it in writing before you buy and take it to a lawyer. The details of joint ownership are complex.