Houses and "Significant Others"

Q. My significant other and I live together in a home that our landlord has offered to sell to us at a very reasonable price. We would like to continue to live here so we are seriously considering buying. However, I have good credit; he does not. Because of his bad credit he does not want to go through the mortgage loan process so I would be the one actually buying the house. But, since we would be splitting the household expenses like we do now, he wants his name on the deed also.

Is this a good idea? Only my name on the mortgage but both of our names on the deed?

Thanks for your help.



A. You’re really asking me two questions. The first is, should you buy the house from your landlord. The second is, should you put your “significant other” (and isn’t that a loaded phrase?) on the deed, but not on the mortgage. They are two different questions, which (as you might expect) require two different answers.

The first question isn’t really a legal issue at all. Should you buy the house from your landlord? That’s really a question of practicality. You say it’s a good price. Just make sure that it is. Do a little research, contact some realtors, check the papers, and see what houses in your neighborhood, town, and county are selling for. Compare those prices with the price you’re being offered by your landlord. You might also consider having your house appraised (and not necessarily by a mortgage company, which will have an incentive to appraise the house for about the amount of the loan they want to give you). If it’s a good price, real estate is almost always a good investment. As my grandfather used to say, real estate is the one thing they ain’t making any more of.

The second question really isn’t a legal issue, either, although how you decide to act will have legal ramifications. As to the mortgage part of your question, one person with good credit and one person with bad credit often apply for mortgages together, with the person with the good credit being primary on the loan. (You should talk to a good banker, or mortgage lender, about the situation). Plus, the added benefit of two incomes on the application might offset any “bad credit” that your significant other might have. Remember, if you are the only one on the mortgage, you are the only one obligated to pay the mortgage, no matter who else is living in the house with you. If it’s only you on the loan, it’s only you the bank will come after if there are problems.

That being the case, it makes little sense to me to put your “significant other” on the deed for the house if he’s not also paying for the house. He would have all of the benefits of ownership of the house without any of the obligations of paying for it. “Splitting the household expenses” is hardly the same thing as splitting the mortgage payments.

And that brings me to the question you didn’t ask me. I’m certainly in no position to question your relationship with your “significant other.” But you have to question it if you are thinking of buying a house with him. (I’m assuming that, because he’s a “significant other,” he’s not a husband.) That being the case, you should know that there’s a big difference under the law between having a husband and wife on the same deed as opposed to having two “significant others” on the deed. Two significant others might just as well be two strangers in most States and in most instances. With spouses, there are things like “rights of survivorship” that are automatic, but that “significant others” don’t automatically enjoy. Plus, what happens if you and your “significant other” are no longer so significant to each other? If your relationship ends, but he’s on the deed, how easy will it be to get him off the deed and out of the house – especially if he’s not paying for it. When a marriage breaks up, the laws of the states usually help you take care of the division of property. Not so when a relationship breaks up. Depending on the State you’re living in, you might even have to file a lawsuit to get a court to decide who gets the house. As you might expect, that could get ugly.

As I said, whether you put him on the deed or not is not really a legal question. Whether you do or not may have legal ramifications down the road, depending on how your relationship goes, and only you can answer that question.

You didn’t ask for my relationship advice, but I’m going to throw it in anyway. If your significant other is not willing to obligate himself on the mortgage (bad credit or no), I’d think long and hard about sharing ownership of a house with him. I would suggest that such unwillingness to join in the house-buying process, coupled with his apparent comfort with “splitting the household expenses”(just like always), might be an indication of an inability to commit that won’t serve you well down the road.

Finally, I suppose that you could buy the house yourself, with only you on the mortgage and the deed. Then, if you ultimately get married, you could add him to the deed at a later time. (That’s pretty easy to do.) In the alternative, you could enter into a written contract with him in which he agrees to pay you a specific amount each month towards the mortgage payment. This way, you’d be protected. (Yes, I know, it’s not very romantic, but you didn’t ask me how to be romantic. That’s one of my other blogs.)

Good luck. I hope things work out.