My girlfriend and I have been dating for almost four years, most of that long distance. After much searching, I finally found a job in New Jersey, so we can now buy a condo and move in together (Yay!). The problem is, I don’t know if I should apply for a mortgage jointly with her or individually on my own. She would like to have her name on it, but I’m not sure how that will affect the interest rates I am offered or my chances to get approved.
Our financial situation is (roughly) as follows: I am 25, have good credit, no car payments, a small student loan payment, and I will be making a decent wage as a Software Engineer. She is currently working at an unpaid internship in NYC, but hopes to start getting paid in the next few months. Her credit is not that great, and she will have to start making student loan payments (which are a lot higher than mine) in November, since she graduated in May.
We are hoping to buy something in the $250K range, and I will only be able to put about 3 or 4 percent down. Renting is about as expensive as buying in the area we are looking at.
This is my first time buying a home, so any and all tips are welcome. Thanks.
you need to make an appointment with an experienced real estate lawyer in nj, whose practice is in the county you are purchasing in, before you go any further.
from what you have said, your girlfriend would have an enforceable interest in the property should you break up after living together in the property, even if the mortgage is in your name only.
also, if her name is on the mortgage, it will also be on the deed.
everyone goes into these relationships expecting it to work, and thinking the best of the other person involved. it doesn’t always turn out that way.
I hate to say it, but CantUseMyRealName’s got a point. Although your relationship seems peachy now, it’s best to plan for the worst case scenerio - not that it’ll actually happen, but you know, things happen. So just to be safe, I’d put both of your names on it, and if possible, draft up a contract dictating how much you’re both paying, what you would plan to do should you break up (you sell your share to her, you both sell and split the money, etc.), get it notarized and both of you keep your copies. Buying property is too much of a responsibility to just rely on love and trust to see bad times through. I can’t tell you how much heated court battles I’ve heard of because a divorced couple couldn’t agree on who gets the house or the car, etc. It can get pretty ugly if both parties don’t compromise.
<slight hijack>That’s why the SO and I plan to have a very detailed prenuptial agreement drafted up before we get married just to protect both sides of the family should anything happen and we decide to separate. We think it’s better to be safe than sorry.</slight hijack>
I hate to be cynical, but you have to plan for possible bad incidents in your life. And property is too much of a blessing/curse already without the added stress of arguing over who gets what should anything happen in the future between you.
Unless you are married, her name does not go on the mortgage. I have a friend at work who got her finances entangled with her boyfried so badly that when they broke up, she ended up spending months trying to get her name off his car lease and get her car insurance back into her name.
If and when you get married, you can add her name later. Until then, nothing joint.
What ivylass said…for all the obvious reasons, and for another not-so-obvious reason: do both of you have wills, and are you familiar with the laws concerning property in your state should someone die intestate?
What if her name was on everything, and something happened to her? You could very well find yourself dealing with her family over her interest in the property.
I know I sound like the voice of doom here, but hopefully it will get you thinking a little more about the whole situation.
Finally, things your lender will take into consideration when determining your eligibility for a mortgage (and your interest rate, BTW) are your income, how much debt you have and of course, your credit. If she is worse off than you are in these areas, having her name on things will only get you a less desirable loan than you can get on your own.
– Cherry2000 , who has been with her boyfriend 7 years, lived with him for 6 years, and is the only one whose name is on the house or the mortgage
Not necessarily true. My SO and I have been together for 13 years and 6 mortgages now. His credit score is better then mine. Our loans have always been based off of both incomes, but using his credit score. Don’t ask me how it’s done, but that’s the way it’s worked for us.
g/f, does this term imply a long term relationship, say exceeding the terms of a typical mortgage, 15-30 yrs? It doesn’t sound like it to me, but what do I know.