We can thank statistics for that: In 2011, Statistics Canada released their data about marriages in Canada, and the percentage of Canadians who were in common-law relationships jumped from 3.5% in 2001 to 11.5% in 2011.
So what would have been a fringe interest – buying a house with a partner you’re not married to – back in 2001, is now something that’s a legitimate possibility. Dare I say it, it might even be mainstream-adjacent. (But like, so is VR. We live in such interesting times, you guys.)
But jumping into hundreds of thousands of dollars of debt with someone you don’t have a contract with (ahem, normals call it marriage) isn’t for the faint of heart. I should know: I bought a house with my boyfriend a few months ago.
Related: Cohabitation agreements and living together common law – what you need to know
If you’re gearing up to dive into home ownership with any kind of partner you’re not married to, here’s the (yes, long) list of things you’ll need to do to make sure you’re both taken care of and prepared for the process.
Because the last thing you want to hear in a home-buying experience is “Surprise!”, trust me.
Get transparent, fast
Whip it out.
And by “it”, I mean your bank accounts, credit scores, debt and savings.
Yeah, that IS even more fun than you thought it was going to be.
Related: How to split finances with your partner
In all seriousness though, you’re about to dive headfirst into the largest purchase of your life with another person. You both deserve to know exactly who you’re getting into this with, from a financial perspective, even though you’re not married.
Sure, you know which side of the bed they prefer, but do you know how much they have in their RRSP? You should.
When you’re getting the financial details on the table to prepare for a house purchase, you’ll want to talk through at least the following details:
- How much do you make?
- How much can we put down on a house?
- What’s your credit score?
- How much do you have in savings?
- How much debt do you have?
And if this seems like a lot, all at once? It’s because hopefully, you’ve at least dipped a toe into these waters if you’re going to be buying a house together. If not, feel free to tackle this over multiple sessions, but you will need to get it all out there eventually.
Related: Should couples have joint or separate bank accounts?
Don’t be the guy or gal who asks the mortgage broker to lie to your partner about why you can’t get the mortgage you want, because you didn’t tell them about your debt or your income. You don’t want to be that person.
Make sure both people are involved at every stage of the process
Since this is a joint purchase, it should be really, really, aggressively joint, especially since you’re not married yet.
You and your partner should aim to participate equally in each part of the process, from attending open houses (fun!) to mortgage pre-approval meetings (also fun, but I’m a nerd, so).
Each step will give you a great opportunity to check in with each other, and figure out which page you both want to be on.
If you’re at an open house, and you honestly think you won’t be happy long-term without a master bathroom? Tell your partner. If you see a house you love, but the price tag makes you really anxious, and you think it’s a bit out of reach for the two of you? Tell your partner.
Every conversation you have during the process will help keep you on the same page and make sure you’re tackling this as a team.
Figure out how you want to handle the legal stuff
Since you’re not married, buying property together is probably the biggest legal commitment you’ve made to another human being, ever.
You can skip the big party and the white dress all you want, but there are still going to be contracts involved in the process, and you’re both taking on a pretty big responsibility to one another. That means you’ll need to talk legal to each other.
Specifically, the biggest thing you’ll want to get clear on, and the one that will impact how much legal help you’ll need from the pros, is how you want to handle joint ownership of the house.
The default setting is that both of your names will be listed as owners, and in the case of any division of assets, the house is 50% yours and 50% theirs. Plain and simple, and this option won’t require any legal help beyond the typical real estate lawyers involved in the sale.
But if one of you is putting down 80% of the down payment, and paying 80% of the ongoing costs, is that something you want to take into account? You can, if that makes sense for you: You’ll need a partnership agreement that lays out the percentages and responsibilities for each person, and you should consult a lawyer to get that drawn up.
This process is important to talk through before any money gets put on the table, too, because it’s a critical part of your new home-buying partnership. There are a lot of feelings that go into who-pays-what, and a metric ton more feelings that go into a house.
Talking through these things ahead of time might not be easy, but it is necessary.
Get life insurance, stat
If you get hit by a bus, will your partner be able to handle the financial commitment of the house on their own?
** You need insurance. **
I’m no insurance broker, but I can tell you what my partner and I are doing to handle our insurance needs. We looked at our future plans, our current income, and our house price. We picked an amount that would cover the house and a few years of our salary, and both got coverage for that amount, for a term that would see us through raising kids if we’re lucky enough to have them.
The one thing I will say as an absolute? Do not buy the mortgage life insurance that your bank offers you as an upsell. It’s a horrible deal since you’ll pay the same amount every month for a payout that declines as you pay off your mortgage.
Go get a term life insurance policy instead, and call it a day.
Make sure you’re both aligned on this as a life choice
Yeah, you thought the financial talks were detailed?
If you’re not married, you need to treat buying a house together as if it’s basically the same thing.
It’ll cost you thousands of dollars, and everyone will like it on Facebook. No drunk uncles, but like, otherwise pretty similar.
From a purely pragmatic standpoint, do not go into this without having discussed what your future will look like as a partnership.
- Do you both want kids?
- Would you prefer to have dogs instead?
- Are you going to get married someday?
- Do you both want to live in this place for a while?
- Are you both committed to living in this city for a while?
Do not – I repeat, do not – end up selling your house in a year and a half because whoops, you forgot to have the kid talk before buying a place together and now you’re splitting up because you want them and they don’t, or because you bought a one-bedroom when you both want seven kids, yesterday.
You will lose money on closing costs alone, and the logistics will be a nightmare.
Have the talk now.
Build a collaborative budget
A big part of buying a house together is building out a budget – current and future – that works for both of you.
Personally, we’ve benefitted greatly from friends who are a few years and a few steps ahead of us, so we’ve got all the heads-ups of what to expect and what curveballs to plan for. (One friend even sent me a Snap of her daycare invoice, which was probably the worst thing I’ve ever seen on Snapchat.)
We both knew we didn’t want to feel like we had no money to spend on fun every month, and we both knew we’d have to factor in a parental leave plan and a daycare-budget plan sometime in our future.
From those starting points, we worked backwards and built a budget that would allow us to handle our housing costs and other commitments and still have the flexibility to do those things.
Get clear on what you want to do and have in your life – and your budget – along with your partner. Making those numbers work will help keep you on track during your house search, and avoid getting sucked in by houses that are a bit outside your budget.
Assign “project managers” to different parts of the process
There’s a lot that goes into buying a house, and logistics are a big part of it.
- Who’s in charge of finding a realtor and working directly with them?
- Who’s going to figure out the mortgage stuff?
- Who’s booking movers?
- Who maintains the budget and keeps track of what you’re spending?
- Who’s going to shop around for house insurance?
Take advantage of the fact that you’ve got a partner in this, and divvy up the work.
Make sure one of you has the ultimate responsibility for different parts of the process, and that you’re both clear on who’s doing what – so that you don’t end up with no way to move on the 1st of the month because “I thought you were booking the movers!”
Communication is your real secret weapon
No matter how prepared you are for the process, things will come up. You will run into issues, whether it’s a surprisingly low credit score or a debate about increasing your max purchase price juuuuust a bit.
If you’ve already been through the life talks, the money talks, and the budget talks, you and your partner should be well-practiced at handling tough conversations (a great perk, beyond just getting clear on the contents of those conversations.)
Oh and speaking of conversations, one more you should prepare for: Literally, every person you deal with during this process will ask you if you’re going to get married.
Yes, including your realtor. And your parents. And your home inspector. And your coworkers.
You’ve been warned.