Buying A Home Together Before Saying ‘I Do’

The Weekly Recap

Good Morning! The Bank of Canada was the first of the G7 economies to lower interest rates by a quarter point, with the ECB following suit- let’s hope we’re not too far behind. Texas is looking to launch its own Stock Exchange, New Yorkers rejoiced as Congestion pricing has indefinitely been suspended as it was slated to take affect 6/30 although the celebration was short lived as Hochul later announced raising some other yet to be identified tax instead. Instagram is testing out unskippable ads, networking is making a comeback, Bill Ackman plans to IPO Pershing Square and former First Republic customers do not like that they have become ‘average’ customers at JP Morgan Chase since the merger.

Buying A Home Together Before Saying ‘I Do’

Buying a house with a partner before marriage is becoming more commonplace as now every 1 in 5 home purchases were from unmarried couples according to data from the National Association of Realtors. In a market environment where rates are higher and rental prices are becoming more and more expensive, it may be financially solvent to purchase together rather than continuing to rent. Even without being married, purchasing a home together binds you and your partner in a real and legal way. Here are some tips for you and your partner as you explore opportunities:

Ownership: It’s important when thinking about buying a home how the structure of ownership is going to be relayed on the title. For the most part a spouse has the legal right to inherit a property even if there is no will stating such while domestic couples do not share that same automatic right. There are three options here, one is Tenancy in Common, Joint Tenancy with Right of Survivorship and Sole Ownership.

Tenancy in Common allows for equal (50/50) or unequal (65/35) ownership of the home where in an instance one of the owners passes away, their shares pass on to their heirs, IT DOES NOT automatically pass on to the surviving owner.

Joint Tenancy with Right of Survivorship is an equal partnership where upon the death of one of owners, the property automatically passes on to the surviving owner.

There is also of course the ability for Sole Ownership where only one person has complete ownership over the home but the person left off the title risks walking away with nothing if the relationship doesn’t work out.

Mortgage Application: The mortgage process is the same whether purchasing on your own or with a co-purchaser. Getting pre-approved to determine your purchase power is a great way to understand what you could collectively afford. Combining forces to become first time homebuyers can make homeownership possible in both hot and challenging market environments.

Financial Questions to Ask of Each Other: Purchasing a home is usually the most expensive purchase any individual will make, so with that may come some uncomfortable conversations around finance and how to handle not just the purchase, but payments moving forward, here are some helpful questions to consider.

Is the down payment going to be evenly divided? Will mortgage payments, taxes, common charges, repairs and utilities be split evenly? If not, how will they be allocated? What will happen if someone cannot meet their agreed upon portion of the mortgage payments for a few months? What will happen if one homeowner dies? If monthly costs are split evenly but majority of the down payment came from one owner, does that mean ownership percentage should replicate initial investment?

Owning a home is still the American dream. More and more people are trying to find creative ways in which they can achieve that so make sure you go through your own due diligence to see if this is something that may be right for you and your partner as well as how best to protect one another.

Market Performance

Here are how some other indexes and asset classes have performed as of this mornings opening bell.

NYC Market Update

Here is a view of new inventory that has come onto the NYC market over the past week as well as newly signed contracts in Manhattan.

Mortgage Rate Update

Mortgage rates dropped again this week given incoming economic data showing slower growth. With rates just under 7%, we can expect modest declines over the remainder of 2024 as treasury yields soften. Banks are still competing for buyers business’ so shop around for the best rate available to you.

News You Can Use

• Bank of Canada Cuts Rates to 4.75%, Signals More to Come Bloomberg

• European Central Bank Cut Rates for First Time Since 2019, Leaving Fed Behind Axios

• New York Governor Shocks Manhattan With Halting Congestion Pricing Bloomberg

• Nvidia Set to overtake Apple As World’s Second-Most Valuable Company Reuters

• First Republic Customers Are Not Happy With JP Morgan Chase Service Wall Street Journal

• S&P 500 Hits 25th Record This Year as Tech Soars Bloomberg

• Networking Is Back Wall Street Journal

• Private Payrolls Growth Slows in May CNBC

• Rising US Debt Load Poses a Growing Risk for Treasury Market Bloomberg

• 2023 Jobs Numbers Are Likely Over Estimated Bloomberg

• Americans Have More Investment Income than Ever Before Wall Street Journal

• After $2 Trillion Gain, Nvidia Is Still Irresistible Bloomberg

• Job Openings Fall to Lowest Level Since February 2021 Yahoo Finance

• Instagram Tests Forcing Users To Watch Advertisements BBC

The Deep Insight

Contact Me

Feel free to reach out to discuss more in-depth about your real estate goals, share your thoughts about my newsletter, or to share what you're experiencing in this market. Looking forward to hearing from you!