Mortgages Before Engagement Rings: Is It Smart?

by Kristina on December 19, 2013 · 3 comments

Our lake view ;) @Hailey Kent @Milan Suktankar @Linnea Holmen @Lauren Virginia @Maggie Mcmickle for the lake we build around our homes :) perfectionThis is a contribution by Cait Flanders at

Whether we like it or not, “traditional” milestones in relationships are far from the norm in today’s society. For most, the days of getting married, then buying a home and then having kids are long gone.

In fact, a report released earlier this year by Coldwell Banker Real Estate LLC revealed that 24% of married couples between the ages of 18 and 34 got a mortgage together before they tied the knot. Compared to 14% of married couples aged 45 or older that bought a home together first, this shows a huge shift in the priorities of today’s young adults.

“While younger generations may be focusing more on their career, and in turn waiting longer to get married and have children, they are not delaying their dream of homeownership,” said Dr. Robi Ludwig, the lifestyle correspondent for Coldwell Banker Real Estate LCC.

The only question now is: are the couples that jump into homeownership first making the right decision? The statistics from that same report will tell you yes. Apparently, 80% of married homeowners said purchasing their home together strengthened their relationship.

“They not only learn about each other’s wishes and dreams during this process, but they also learn how to be practical with each other and compromise.”

That’s all fine and dandy but – and not to kill the mood – it’s extremely important for both buyers to be smart, understand their rights and protect their assets.

For starters, when you start shopping around for your home, look for something below your max budget so you don’t rely on both of your incomes to make your mortgage payment. Why? You probably don’t want to hear this, but there is always a chance you could break-up. (Remember, there’s no ring on it.)

If you did happen to separate, a decision would need to be made about the home: are you going to sell it or can one of you take over the mortgage and keep it? If the mortgage payments were too high, the only possible decision would be to sell. If one of you could keep the home, you could either stay living in it or try to turn it into an investment property.

Now, if you’ve already decided to take the leap into homeownership, make sure your real estate lawyer or notary assigns you both an equal amount of stake in the property; that means both names need to be on the deed and, in Canada, you each need to claim 50% of the title. Again, not to burst the love bubble, but this will ensure you both get what you deserve should you ever split and have to sell.

Finally – and this one’s important – it’s probably best not to combine your finances. Sure, you can get a joint account for your mortgage payment to come out of, but keep the rest of your money (including credit cards) in separate pockets. Separate accounts keeps each of your credit scores in your own hands only, and gives you access to your own assets should you ever suddenly split.

In the end, only you and your partner can know when purchasing a home together is the right decision. Above all else, make sure you’re both comfortable having the tough conversations that need to happen when it comes to money and love. If you’re both working towards the same goals, and can make mature decisions about the serious stuff, by all means dive in holding hands.

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{ 3 comments… read them below or add one }

1 Kathy December 19, 2013 at 9:20 am

When my son started dating his now wife, I told him three things that I promised to never speak of again. 1. Don’t merge bank accounts unless you marry. 2. Don’t buy a house unless you marry. and 3. Don’t have children unless you marry. Hooray! He followed my advice on all three points. Lease an apartment together if you need to find out how compatible you are. A lease is a lot easier to break if necessary rather than selling a house.

2 Miel December 20, 2013 at 11:40 am

I find this as a very interesting topic. We bought our first place together a year before we got married, though we were already engaged at that point. We started saving and planning before we were engaged though. We signed legal paperwork for ownership.

I’ve had several friends buy, with different arrangements. The one split up but had good legal paperwork (her parents were lawyers) set up. I believe that she paid for it, he helped with some closing costs, and then they split the mortgage. She was lucky that her parents were there for her after they split up, as it would have been more than she could afford.

Another friend bought with her boyfriend, she paid for it and he is paying for furnishings, since he can take those if they split up. Otherwise they will split the cost of the mortgage (he will be saving a lot in comparison to prior rent), but she retains ownership for the investment.

It’s hard to say what is best, but always best to thinking things through!

3 Jen @ Frugal Rules December 21, 2013 at 5:10 am

I don’t understand why marriage has become such a complicated thing nowadays. Does that complication contribute to the many failed marriages today almost anywhere in the world? Maybe yes, maybe no but don’t you wish that marriage, just like any contract, has an expiry date and is renewable and that the conditions may be revised or something?

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