I'm moving in with my partner, who owns their apartment. Should I split the cost of the mortgage, the same as we'd split rent in a rental? What do couples usually do when one person owns and the other doesn't?
While it's natural to want to contribute to household costs when you're cohabiting as a couple, if your name isn't on the mortgage, it's not a great idea to be paying it.
"With a mortgage, that's equity, and someone technically owns it," explains Citi Habitats broker Carol Breitman. "So why would you contribute money to somebody else's asset that you have no ownership over?" It might seem fine at the time, but if you find yourselves going your separate ways, you'll likely have qualms about it.
As Breitman puts it, "You just helped [your ex] out with their mortgage, and then they're on to somebody else."
And keep in mind that just because you might be contributing to those monthly payments doesn't mean you have any legal right to a property that's owned in someone else's name. "I had one situation where a couple was breaking up, one person owned, and the other who had been helping with the mortgage thought they had some ownership of the property," says Dr. Lynn Saladino, a clinical psychologist who consults with Mirador Real Estate. "They were pretty civil with each other, but it was still messy."
But none of this means you have to feel like a freeloader in your partner's home. Instead, just look for alternate ways to make your expenses equitable.
"It depends on everyone's income, but a lot of couples I see in this situation will set it up so that the person who owns the apartment takes care of the apartment [namely the mortgage], and the person moving in can take care of everything else, like utilities and groceries," says Breitman. "You can also contribute toward the maintenance or common charges, which are considered more like rent."
Down the road, Breitman notes, the person who owns will often sell off their original apartment, and keep the proceeds to go in on a new, shared property to create an equitable fresh start.
But in the interim, the key is finding a balance that makes sense for both of your budgets, and feels fair to everyone involved. "Don't assume anything," says Saladino. "It's really important to lay this stuff out clearly in the beginning so that it feels fair. If it bothers you in the beginning it will bother you every month when you're paying bills."
It's even a good idea to lay out your plan in writing, just to make it feel official. "People are usually so happy moving in together that they assume it will be fine," says Saladino, "and while you don't want to go in with a doomsday mentality, it will help with the stability of the relationship to have your arrangement very clearly laid out so that both sides feel comfortable."
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