Buy a home with a partner, friend, or family member without destroying the relationship. Covers structuring ownership, financing together, legal agreements, exit strategies, and protecting everyone's investment.
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Decide on Ownership Structure
Choose between joint tenancy and tenants in common based on your situation
Joint tenancy means equal ownership with right of survivorship (if one owner dies, the other automatically inherits). Tenants in common allows unequal ownership splits (60/40, 70/30) and each person can leave their share to anyone in their will. Unmarried couples and friends should almost always choose tenants in common, because it reflects actual financial contributions and gives each person control over their share. Married couples typically use joint tenancy. This decision affects inheritance, taxes, and what happens if someone wants out.
Determine each person's ownership percentage based on financial contribution
Ownership percentage should reflect total financial contribution: down payment, closing costs, monthly mortgage payments, and ongoing expenses. If one person puts down 80,000 USD and the other puts down 20,000 USD on a 100,000 USD down payment, a 50/50 split is not fair. Calculate each person's total investment including down payment percentage and monthly payment share. Document this clearly before making an offer. Disagreements about money split after closing are the number one reason co-buying arrangements fail.
Discuss and agree on how ongoing expenses will be split
Beyond the mortgage, homeownership costs include: property taxes (1-2% of home value per year), homeowners insurance (1,200-2,500 USD per year), maintenance and repairs (1-2% of home value per year), utilities, and HOA fees if applicable. Decide upfront: will expenses be split by ownership percentage or 50/50? Who pays when the roof needs replacing at 8,000-15,000 USD? What if one person cannot cover their share one month? Write these agreements down before they become real problems.
Get Your Finances Aligned
Both parties should pull their credit reports and share scores honestly
Mortgage lenders evaluate all co-borrowers. The lowest credit score determines your interest rate, not the average. If one person has a 780 and the other has a 620, your rate will be based on the 620 score, which could cost 0.5-1.5% more in interest (tens of thousands over the life of the loan). If there is a significant credit gap, consider having only the higher-score person on the mortgage while both are on the title (consult an attorney about this). Full financial transparency before co-buying is non-negotiable.
Get pre-approved for a mortgage together and understand co-borrower liability
When you co-sign a mortgage, both borrowers are 100% liable for the full payment. If your co-buyer stops paying, the lender comes after you for the entire amount, not just your half. This is joint and several liability. Both borrowers' debt-to-income ratios are evaluated. Get pre-approved together to know your combined purchasing power. Most lenders allow 2-4 co-borrowers. The mortgage appears on both credit reports and affects both parties' ability to qualify for future loans.
Open a joint account specifically for housing expenses
Create a dedicated joint checking account for mortgage payments, property taxes, insurance, repairs, and utilities. Both parties deposit their agreed share on the 1st of each month. The mortgage payment comes from this account. This creates a clear paper trail and prevents arguments about who paid what. Keep personal finances completely separate from the housing account. Set up automatic transfers so payments are never missed. A single late mortgage payment hurts both credit scores by 60-100 points.
Draft a Co-Ownership Agreement
Hire a real estate attorney to draft a co-ownership agreement before closing
A co-ownership agreement (also called a co-tenancy agreement) is the single most important document in a co-buying arrangement. It costs 500-1,500 USD in attorney fees and covers every scenario that could go wrong. Without it, disputes go to court, which costs 10,000-50,000 USD in legal fees. Every co-buying arrangement needs one, including married couples, family members, and close friends. The agreement should be signed before or at closing.
Include exit strategies: what happens if someone wants to sell or cannot pay
The agreement must address: right of first refusal (if one person wants to sell, the other gets the first option to buy them out at fair market value), buyout terms (how fair market value is determined, typically by averaging 2-3 independent appraisals), timeline for buyout (30-90 days), what happens if neither party can afford a buyout (forced sale), what happens if one party stops paying (the other can cover payments and adjust ownership percentage or force a sale), and dispute resolution (mediation before litigation).
Address major decisions: renovations, refinancing, renting, and guests
Your agreement should cover: renovation decisions (who approves spending over a certain amount, such as 500 USD), refinancing (both parties must agree), renting out rooms or the property (both parties must agree, how income is split), major maintenance decisions, and house rules for shared spaces if you are living together. Also address: what happens if one person wants to move in a romantic partner, what happens if one person needs to relocate for work, and insurance requirements (each person should carry contents insurance on their own belongings).
Include provisions for death, disability, and relationship changes
Address what happens if a co-owner dies (does their share go to their estate or to the surviving owner?), becomes permanently disabled and cannot contribute financially, gets married or divorced, files for bankruptcy, or faces a legal judgment. Consider requiring each co-owner to carry life insurance naming the other co-owner as beneficiary (enough to cover their share of the mortgage). Without these provisions, a co-owner's death could mean you suddenly share a home with their heirs, who you may not want as co-owners.
Find and Close on the Home
Agree on must-haves and dealbreakers before house hunting together
Co-buyers often have different priorities. Before touring a single home, each person should independently list: 5 must-haves (non-negotiable requirements), 5 nice-to-haves, and 3 dealbreakers. Compare lists and find the overlap. Common disagreements: location versus size, renovation fixer-upper versus move-in ready, and budget ceiling. If you cannot agree on basic requirements after 2-3 discussions, reconsider whether co-buying is the right choice. Touring homes with misaligned expectations wastes everyone's time.
Make sure both parties attend the home inspection and review the report
Both co-buyers should be present at the home inspection (costs 300-500 USD). The inspector checks structural integrity, roofing, plumbing, electrical, HVAC, foundation, and pest damage. Both owners need to understand the home's condition because both are financially responsible for repairs. If the inspection reveals 15,000 USD in needed roof work, both parties must agree on whether to negotiate the price, request repairs, or walk away. Do not let one co-buyer pressure the other into ignoring inspection findings.
Review all closing documents together with your attorney before signing
At closing, both parties sign the mortgage, deed, and other documents. Have your real estate attorney review everything before the closing date, not at the table. Confirm: ownership structure matches your agreement (tenants in common with correct percentages), both names are on the title, the co-ownership agreement is signed and notarized, and both parties have copies of all documents. Closing costs run 2-5% of the purchase price, split according to your ownership agreement. Keep copies of every document in a shared secure location.
Manage the Ongoing Partnership
Schedule quarterly financial check-ins to review expenses and maintenance needs
Set a recurring quarterly meeting (put it on both calendars) to review: joint account balance, upcoming maintenance or repair needs, any concerns about the arrangement, and whether the current expense split still works. Proactive communication prevents resentment from building. Treat it like a business meeting: bring receipts, review spending, and document any decisions made. If you skip these meetings, small frustrations compound into relationship-ending arguments.
Keep detailed records of every expense, improvement, and financial contribution
Maintain a shared spreadsheet or use an app like Splitwise to track every housing-related expense. Categories: mortgage payments, property taxes, insurance, utilities, maintenance, repairs, and improvements. When it is time to sell or someone wants out, you need clear records of who paid what. Capital improvements (new kitchen, bathroom remodel) increase the home's value and should be credited to whoever paid. Maintenance (fixing a leak, replacing a furnace) preserves value and is typically split per the ownership agreement.
Frequently Asked Questions
What happens to the home if co-owners break up or have a falling out?
This is exactly why the co-ownership agreement exists. Typically, one person has the right to buy out the other at fair market value (determined by independent appraisals). If neither can afford a buyout, the home is sold and proceeds are split according to ownership percentages after paying off the mortgage. Without a co-ownership agreement, you may need to file a partition action in court, which forces a sale but costs 10,000-30,000 USD in legal fees and can take 6-12 months. The agreement should specify a mediation-first approach to resolve disputes before litigation.
Can unmarried couples co-buy a home?
Yes, and it is increasingly common. About 20% of first-time homebuyers purchase with someone other than a spouse. Unmarried couples should always use tenants in common (not joint tenancy) so ownership percentages can reflect actual financial contributions. A co-ownership agreement is especially critical for unmarried couples because they lack the legal protections that divorce proceedings provide to married couples. Each person should have independent legal counsel review the agreement. Both names should be on both the title and the mortgage.
Does co-buying affect my ability to get another mortgage later?
Yes. The full mortgage balance appears on both borrowers' credit reports, and the full monthly payment counts against each borrower's debt-to-income ratio. If you co-buy a home with a 2,000 USD monthly mortgage payment, that full 2,000 USD (not 1,000 USD) counts against your DTI when you apply for another loan. Some lenders will exclude the co-owned mortgage from DTI if you can document that the other borrower has made the last 12 months of payments from their own account, but this varies by lender. Plan for this impact on future borrowing.
How do we handle it if one co-buyer wants to make expensive renovations?
The co-ownership agreement should set a spending threshold (for example, any improvement over 1,000 USD requires both parties to agree). If both agree, decide how to fund it: split by ownership percentage, one person pays and gets credited at sale, or finance through a home equity loan (requires both signatures). If you disagree, the renovation does not happen. One co-owner should never make major changes without the other's written consent. Document all improvements and who paid, as this affects the equity split when you eventually sell.