Should You Buy a House Without Your Spouse?
If you’re married, the general thinking is that when you buy a home, you buy it with your partner. But just because you’re married to someone doesn’t mean you have to also invest in real estate with that person. In fact, there may be situations where buying a home on your own could be the better move.
Pros
If you buy a home using your own earned money or money inherited before the marriage, it can make sense to keep your spouse off the deed, title, and mortgage. That way, the property clearly is in your name and can be sold or mortgaged at your sole discretion. You own it. Case closed.
It could help you get a better deal from your lender. If you have an great credit score, but your spouse doesn’t, buying a home on your own could help you get a better rate on your mortgage.
It also could protect the property from creditors. Touching back on if your spouse has less than perfect credit, if creditors ever go after your spouse, having the home in your name alone will ensure the creditors can’t seize the property. Buying a property alone also simplifies things in the event that you pass away. If you own the home on your own, you can leave it to whomever you like in your will with no sign-off from your spouse necessary.
Cons
There are, however, downsides to buying a house without your spouse. Before you keep your spouse off the deed, you should know that there are some potential downsides to this arrangement that extend beyond any hurt feelings. After all, you did promise “for richer and poorer” and there are a few more good reasons to have your spouse on the deed even if you alone pay for the property.
- To deal with your HOA/condo board: Some homeowners associations will talk only with the person whose name is on the deed. This means that all communications must go through you, which can be a hassle!
- To build assets as a couple: If you plan on growing your financial future as a couple, it is always a good idea to own substantial assets together. This will make you both more creditworthy when looking for funding.
If you do decide to keep your spouse’s name off the deed, be advised that you will probably need your spouse’s consent. Many lenders will require your partner to sign a quitclaim deed. This is a document “disclaiming” any interest in the property. This allows the lender and the borrower to help protect themselves from future title disputes.
So what would happen if you and your spouse got a divorce after purchasing a home?
If your home was purchased during your marriage, the judge would not even look at whether or not both of your names are on the mortgage or even on the title to the home. It is presumed that the house is a part of your community estate if purchased during your marriage. There are exceptions to this rule, but those exceptions need to be supported by evidence. Otherwise, the community property presumption would hold, and the house would be subject to division in your divorce.
Supposing that the house you own is community property, a decision will need to be made about what you and your spouse will do with the house. Option one is to sell the house and then split the equity made in the sale. How that equity is divided up would be determined based on the circumstances of your specific divorce.
The other alternatives would be for one of you to remain in the house after the divorce or the house will likely need to be sold as a part of the divorce. If it’s not sold, you will need to determine if this is financially possible for either of you to do. It is up to you to determine the details inside the divorce. Talk with your lawyer about your options and whether or not it would even be in your best interests to remain in the house after the divorce.