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Achillia

Applying for a mortgage: my credit is good, my partner's not so much

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My partner and I are planning to buy a condo. I'm going to be the main investor, since I will be putting down a big honking down payment. My partner will put down a little honking downpayment. The mortgage will be about 1/4 of the total cost.

 

My credit is pretty good (low 700s) and will be even better in a couple of months once I have paid off some tradelines. My partner's credit though is.... pretty awful. It will get better eventually but not anytime soon.

 

I am thinking it might be better to take the mortgage in my name only, and then we can write up a separate contract/agreement covering what portion he will pay and how we will handle it if we ever part ways (I think I would just buy him out). 

 

Surely others have faced something like this before. Advice?

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by partner are you speaking of an biz partner or a spouse/significant other? It sounds like you're talking about biz partner; if so, having a contract with each other is probably a good idea as you are not investing the same percentage. but if the partner is to be on the deed, a lender will want his/her credit included.

 

what is your partner doing to improve his/her credit to get ready for the purchase?

 

 

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Not a business partner, just my significant other. We love each other dearly but have no plans to get married. I would prefer to have only my name on the deed since I will be paying for the lion's share of this, but I also don't want my partner to be a housemate.

 

She would be ponying up about 100-150K toward this, and, in the HCL city where we live (Boston), this would make all of the difference between being able to buy a nice enough place and being able to buy a much nicer place.

 

So yeah, a contract. Has anyone out here ever drawn up such a contract? What would you stipulate? I was thinking that we would agree on how much of the mortgage she would be responsible for, that I would buy her out for her portion if we ever parted ways, and that this payment would reflect the market value for her share of the property as determined.... how? 

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Contract is something that you REALLY would do well to consult local counsel versed in such matters.  I guarantee that they will have contingencies that make sense but that you would never think to put in. 

 

If the relationship is such that you are contemplating a purchase of that size, then you can afford a few hours of time with a lawyer who does gay/lesbian family law. 

 

 

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Girlfriend and I bought a house in 1991.  We had been together for 6 years (known each other for 14 years but had been a "couple" only since shortly before we moved in together). 

 

She had a trio of student loan collections on her credit report (then in repayment through a rehab consolidation), sufficient to nail her credit scores.  I had sufficient income from which to qualify for the mortgage. .  Further, down payment was largely sourced from my employer 401-k.  Went ahead and obtained the mortgage solo.  House was titled to me, alone.  (In hindsight, I now realize that I could have titled jointly nonetheless and would have done so since our finances at that time were fully intertwined.)

 

We married in 1993 and, when we refinanced in 1997, re-titled the home in both our names.

 

In your circumstance, where you refer to the condo purchase as an "investment", it's apparent that you very much consider your contribution to the down payment to be just that:  your investment.  For this reason, and those noted by others, consulting a lawyer to draw up a basic agreement that protects both of your rights in the property.  I would look to input from him whether it's prudent to place both names on the title (however, my guess is the answer is "yes").  As far as the mortgage, it seems best for you to take the mortgage solo.

 

 

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