Expert: Dick Dennis - 5/16/2006

Question
My boyfriend and i are going to be buying a home together.  Since i have a co-op i am selling, and will have about a $70,000 profit from sale, i will be putting that towards the downpayment.  We will both be obtaining a mortgage and splitting the monthly payemnts.  Is there something we could put in writing to establish in case things dont work out to say that i put up the downpayment and would be entitiled to that percentage if we should sell?

Also, i have a questions about mortgage approval.  My credit score according to experian is 780.  I have 8 credit cards, 6 with a zero balance, 2 with small monthly balances that get paid in full each month.  But i have high credit limits ($40,000 total from all cards) and i only make $42,000/year - will this affect my approval?  Should i ask my credit cards to lower my limits - and if so - how much?

Thank you so much for your help!


Answer
First thing you should do, Cindy, is to go with your boyfriend to a REAL ESTATE attorney to put together an agreement as to who is responsible for what and what happens if you should break up, etc.

I am telling you this because if you buy a house without having legitimate document saying the above, then you are asking for problems. Also I am getting the impression that he is not putting as much down payment as you are. Cindy, I have seen so many times where the boyfriend skips out and leaves her to take care of the responsibilities. In fact, I just answered an email from a lady who owned her house and foolishly put her boyfriend on title with her. Two weeks later he skipped out to Vegas and left her to worry how to get him off the title.

Love is love, but business is business, Cindy.

As for how high your credit limit should be, it doesn't matter. Do you know you would get a lower score if you had credit cards with zero balances than credit cards on which you pay off each and every month? Just do not use the whole $40,000 unless you know you'll be paying it off.

Don't put your boyfriend on title AND loan with you WITHOUT sitting down with a REAL ESTATE attorney. The cost of the attorney will be well worth it. Make sure the boyfriend does split the cost of the attorney, too. That might give you the first hint on what to expect later on.

I wish you well. By the way, my wife and I have been married for 52 years. Does that tell you we have trust in each other?

Dick Dennis        dixiedee13@aol.com