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First time home buying tips for new couples

by Jim ONeil on February 17, 2011

in uk loans news

Being in love is grand, but affection is not always conducive to smart financial practices. No one wants to think about the day the relationship ends, but establishing some ground rules can make things less complicated if it does.

There are several ways to be wise when it comes to money and a relationship. Following these can make both flourish over time.

Keep credit cards and loans separate because joint credit agreements can create a mess. When a couple signs a joint agreement and then breaks up, one party can be on the hook for the entire debt if the other party refuses to pay his or her portion. A partner with a poor credit history can actually cause a joint application for a mortgage to be rejected, even if the other person has an excellent credit rating.

The law does not recognize an unmarried couple so if a partner dies without a will and has no relatives, all assets will go to the state rather than the surviving partner. Unmarried couples should create a will, designating what assets the living partner should receive. Do-it-yourself wills can be purchased online or from stationers or a will can be professionally drafted by a solicitor or will-creation service.

It might make sense to establish a joint bank account for rent or mortgage payments but keep savings accounts separate. Doing so makes it easier to track individual spending and makes division of funds simpler should the couple split. Create separate cash ISAs for joint savings goals like holidays or weddings.

Purchasing a home is the largest financial commitment an individual makes. The couple should consider whether they want to serve as joint tenants, with each person having equal ownership of the property. The property cannot be sold or re-mortgaged without the consent of both parties. In a tenants in common arrangement, each person owns a specific portion of the value and can mortgage it, give it away, or sell it.

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