Expert: Karyn Foley - 7/27/2010

Question
My boyfriend wants to buy a house together and we are not married. I suggest we wait until we are married in 6 months and then seek buying a house. I told him I don't think it is a good idea if we buy a house before marriage but he says the contract will be all we need since both our names will be on it and neither of us can sell without the other permission. Also I suggested we may want to get some credit together to boost our score. What do you think? And is any of this a good idea? How long will it take our score to change if we do a credit card together?

Answer
Dear Lorane:  
 You bring up some excellent questions, and I respect your prudent approach to a major purchase.  First of all, you should sit down with a mortgage broker/lender, and give him all requested documentation.  This will include pay stubs from your jobs, credit card balances, regular monthly payments such as any child support, balances on student loans, car payments, and so forth.  He will also need information from you on other matters, all of which together will allow him to check on and determine your credit rating.  He/she will then tell you if you are qualified to make a home purchase.  If you are, he will tell you the highest price home you can afford, your best interest rate and loan program, and what your monthly payments will be that are for the loan's principal, interest, taxes, and insurance.  You will also need a down payment with available funds you will have in your bank savings and checking account, monies on deposit with a credit union, anything and everything that proves you have available funds. There are no longer loans that do not require a down payment.  If a family member is going to give you money for the down payment, there must be a gift letter with the appropriate wording.  YOu cannot borrow money for the down payment; no borrowed money for the purpose of borrowing more money.  You need to be qualified in advance so you can prove yourself when you may an offer to purchase, then verify everything within the next few days:  all according to a contract that you will sign.
 You can take title in many ways.  In today's market, there are usually many buyers for the same house in the first time home market.  You should discuss ways of taking title with an accountant or an attorney.  Unmarried couples do have choices on how to take title.  It is always a concern about selling, even if you are married.  Division of assets are problematic, and this should be spelled out clearly to you so you understand the ramifications.
 You call him your boyfriend.  Aren't you engaged yet?  Are you one hundred percent certain that you are getting married?  Stability is important so please take the time to think this out.  
 You don't need a credit card together; you each have your own individual cards and your own credit ratings.  If one of you has bad credit, the other person will need to do the contract, the loan, and be the responsible party legally.  Again, continuity counts, as the name on the deposit check should match the name on the offer which declares the name on the mortgage.  You can change title after the closing, but the person on the loan remains the person on the loan unless and until it is refinanced and the other person is qualified to be added on.
 Buying a home together is a wonderful and smart way to start a life together.  However, you should do your homework in advance.  Knowledge and information is paramount.
 Good luck in the endeavor and happiness in your life together!  KARYN FOLEY
(I am having a problem with my computer and cannot get acknowledgement that this response is being sent to you.  So, if you get this mutliple times, I apologize.)