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I am considering a mortgage with my girlfriend.
I know when married and a divorce is lined up, everyone lawyers up and settles accordingly.
But if we arent married, and the relationship ends/I want to move out, does she have to sell ? Do I hire a lawyer and the lawyers serves papers, or can the person on the other end of the mortgage make it difficult and hold my downpament/built equity hostage ?
I am not looking to end the relationship already, I ust want to get an idea before going all in what I am potentially dealing with in regards to selling/exiting the mortgage with someone who is not cooperative.
I am considering a mortgage with my girlfriend.
I know when married and a divorce is lined up, everyone lawyers up and settles accordingly.
But if we arent married, and the relationship ends/I want to move out, does she have to sell ? Do I hire a lawyer and the lawyers serves papers, or can the person on the other end of the mortgage make it difficult and hold my downpament/built equity hostage ? Any of the above can happen. The less amicable the split, the uglier things can get. You would both be 100% liable for the debt, and the debt will be listed on both credit reports until one of you (can) refinance the property in their name only.
I am not looking to end the relationship already, I ust want to get an idea before going all in what I am potentially dealing with in regards to selling/exiting the mortgage with someone who is not cooperative. It is just as bad as a bad divorce would be, in the mortgage department.
I try to avoid value judgments here, but you sound a little doubtful as to the long-term health of your relationship.
I try to avoid value judgments here, but you sound a little doubtful as to the long-term health of your relationship.
Thank your for the response.
It basically sounds like we would have to come to an agreement on how to deal with the property/money.
If one party decides to be uncooperative, can I legally leverage the other party to agree to sell? Or is it possible in the event the other party absolutely refuses to sell/ buy me out, I could stand to lose my entire investment ?
You need an attorney to find out exactly what the repercussions may be where you are. Please speak to one before going ahead with this. The hassle you save may be your own.
It’s good you are thinking of this now and not after signing papers.
If one person decides not to contribute any longer to a mortgage payment, the mortgage lender/bank couldn't care less. Either you pay the entire bill, she pays the entire bill, or your jointly deeded property is going to have a lien on it. The lender doesn't care where the payment comes from.
In other words, the mortgage is like any other loan: it must be paid or the collateral behind it will be seized.
That said, if the property has a deed with both names on it, for one name to be removed, one party must succeed to the other. There's no legal instrument that forces one party to compensate the other.
Your voluntary relationship status is of no concern legally.
If you wish for it to be, then you need to have some legally binding contract that enables that to happen. For example, a marriage.
It basically sounds like we would have to come to an agreement on how to deal with the property/money.
If one party decides to be uncooperative, can I legally leverage the other party to agree to sell? Or is it possible in the event the other party absolutely refuses to sell/ buy me out, I could stand to lose my entire investment ?
I assume you would have both names on the deed and both names on the mortgage. So, the answer to your question is yes.
To put it simply, you will each own 50% of the house and 100% of the loan. The loan would have to be paid off before the deed could be transferred in a sale and one party could hold the other party up for payment before agreeing (or worse, disappear so the remaining one is stuck with a loan and inability to sell the house). There are several other very bad scenarios.
If my own children were to ask my opinion about buying a property with a SO to whom they were not married, my answer would be NO, bad idea for all the reasons mentioned above.
Even if you have some sort of agreement drawn up as to what will happen in the event of a break-up, the lender won't care. You will both be responsible for the mortgage until one of you refinances in your name only. The lender won't take one person off the loan because of a break-up.
I sell houses all the time to people who aren't married. What I always tell them is that at the very least, if they don't want attorneys involved, they need to write a Word document that explains exactly what they would expect of each other if things go south and they each need to sign and keep a copy.
That way, at least a court would be able to see that there was an agreement at some point, and one can't hold the other hostage as long. Protect both of you by putting it in writing. Expectations are everything!
I sell houses all the time to people who aren't married. What I always tell them is that at the very least, if they don't want attorneys involved, they need to write a Word document that explains exactly what they would expect of each other if things go south and they each need to sign and keep a copy.
That way, at least a court would be able to see that there was an agreement at some point, and one can't hold the other hostage as long. Protect both of you by putting it in writing. Expectations are everything!
Good info! Thanks.
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