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Mortgage Information for Unmarried Couples

Learn about how unmarried co-borrowers can buy a house together.
Find out what mortgage programs exist that an unmarried couple can apply for.

Mortgage Loans for Unmarried Couples – How an Unmarried Couple Can Buy a Home

Many people ask us if a couple who is not married can purchase a home together.  If you are wondering if you may be able to buy a house as an unmarried couple, the answer to that question is that you absolutely can if you meet the necessary qualifications.  Any two people can apply to buy a home together actually, not just two significant others. Friends, business partners, and any other combination of qualifying individuals can be co-applicants on a mortgage. For any two co-borrowers who are interesting in buying a house, townhouse, or condominium together, this article is written for you.

How Can an Unmarried Couple Get a Mortgage to Purchase a Home Together?

You and your partner can apply for any of the major home loan types such as: Conventional, FHA, VA, and USDA loans. The majority of unmarried couples will find that an FHA loan is the best option for their particular needs.  Would you like to see if you qualify for a FHA loan (and simultaneously compare the loan terms to other types of mortgages you may qualify for)?

Click here to get approved for an FHA loan

Determining what is the best loan option will largely depend on how much of a down payment you want to make, if you have previously owned, or currently do own another home, or if you are first time buyers.  There are slightly different procedures, rules, and tax implications which exist that one should consider before applying for a mortgage. We hope this article answers your questions. If you would like to discuss your specific situation, as well as your desired home buying goals with a home loan specialist directly, you may request a free consultation by submitting your information on this web page.

FHA Loans for Unmarried Couples or Co-Borrowers of Other Types

Most first time buyers, including singles, married couples, and unmarried borrowers alike, opt for FHA loan.  The FHA is for most unmarried couples, partners, or friends who want to buy a home together, the go to source.

Unmarried couples who wish to purchase a home together may find that a FHA loan is the easiest program to qualiy for, as well as to offer the best loan terms. This is especially the case for couples who do not have a large down payment to put down (20% or more), or if both co-applicants do not possess great credit.  Also, conventional loans, VA loans, and USDA loans all have more “red tape” than FHA loans do, preventing some from being able to get a loan.

The minimum down payment requirement of a FHA loan is only 3.5%. For unmarried couples that are first time home buyers, this low down payment option is a very appealing perk.  However, to qualify for this sort of low down payment, you both must occupy the residence.  There are some different rules and restrictions to the LTV of co-borrowers where one party will not live at the home which is being financed.  This is discussed in more detail below.

More reasons unmarried couples may want to consider the FHA:

  • Your bank accounts do not have to be jointed.
  • You do not have to show having lived together prior to buy the home.
  • The money for the down payment can also be borrowed or gifted.
  • Future refinances can be streamlined and usually do not required pulling credit, providing bank statements, or asset information. Appraisals are also usually not required on the FHA streamline refinance.

With FHA loans you can either have a co-borrower or co-signer to help you qualify for the loan.  The two are similar in that the cosigner would be liable for payments like co-borrowers are, but they do not have the same interests such as in the title of the property or the equity.  A co-borrower is a joint owner, whereas a cosigner is merely just signing to agree to help pay the mortgage payments.

An important thing to note about FHA loans is that having a non-occuping co-borrower or cosigner changes what many applicants will qualify for.  If you both plan to occupy the property together, and as your primary residence, then you do not have to worry.  However, if your the co-applicant is not going to occupy the property, your LTV may be restricted to 75% instead of as much as 96.5%.  This means that your down payment could be as much as 25% instead of 3.5%.  However, this is usually only applied to non-family members who cosign or co-borrow.  You may be able to have a family member such as a parent or sibling cosign/co-borrow and still be awarded an approval for the 3.5% down payment.

To learn more about FHA loans for various types of co-applicants, give us a call and speak with a loan specialist who can discuss your exact situation.

Click here to get an FHA approval and rate quote

Conventional Loans for Unmarried Couples

Any couple who has 20% or more to place as a down payment and have good credit history should first consider a conventional mortgage. Additionally, if you are buying a second home or investment property, you will want to look at a conventional loan.

VA Loans for Unmarried Co-Borrowers:

The VA allows unmarried co-borrowers to get a VA loan. However, there is no guarantee that you will be approved for 100% financing and might be required to place a down payment. The strength of your partner or friends credit worthiness, financial history, and other qualifying factors can strongly influence the underwriters decision.

USDA First Time Buyer Mortgage:

If you want to buy a house in a rural area you might want to apply for a USDA loan. The United States Department of Urban Housing allows 100% financing on eligible properties.

Things to Consider Before Buying a Home with Your Partner

Before you and your boyfriend, girlfriend, significant other, or friend start the process of buying a home, you may want to take somethings into consideration. What are the “cons” to a joint home purchase for unmarried couples?

Unmarried couples do not receive the same tax and estate planning benefits that married couples enjoy. You can still receive tax deduction benefits for the interest paid, but legal experts say that you must file separately.

While we are unable to provide concrete legal advice, we can provide what is considered generally important advice for ummarried homebuying couples. You should strongly consider speaking with an attorney to draft a contract (cohabitation agreement) that details who is responsible for what (in terms of mortgage payment, taxes and insurance, the down payment, and who is entitled to and responsible for what in the event of a split).

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