California residents who are not married to their partners may have few legal protections when it comes to purchasing a home with them. Therefore, it may be a good idea to create a written agreement as it relates to what happens if an individual splits with a partner. If a split were to occur, a contract could determine who moves out or if the house is sold as a result.
As long as both parties agree to it, almost any method of resolving such an issue is valid. In fact, it may be legitimate to settle the matter of who keeps the house by flipping a coin if both sides accept that stipulation. It may also be a good idea to have a written or verbal understanding as it relates to how to split a down payment, monthly mortgage payments or other costs.
Those who put their names on the mortgage should understand that they could still responsible for payments after the relationship ends. However, it may be possible to remove that obligation by refinancing the loan. This is another item that should be discussed before buying a home as it could have a long-term impact on a person’s financial situation and credit score. If refinancing is not possible, it may be necessary to sell the house.
It may be worthwhile for unmarried home buyers to draft real estate agreements with with their partners. It may also be a good idea to have an attorney review that agreement. This may increase the odds that it is valid under state law and also contains terms that are in that person’s best interest. An attorney may also be able to answer questions a buyer may have about the terms of a mortgage or a purchase contract.