When things go awry in life, love and real estate…

Back in March of 2014, I cautioned about buying a house with a boyfriend or girlfriend and about various things to be aware of if you decide to do it anyway.

Recently I got a call from someone who read my post; but, unfortunately, too late. The caller had purchased a house together with his girlfriend at the time, only to have the relationship sour and break up. He went on to find his soul mate and get married, all the while living in the house that he had purchased with his ex-girlfriend (whom it must be noted had stopped paying when she moved out). Now the ex-girlfriend wants him to sell the place or buy her out of the mortgage obligation that she still is recorded upon. Unfortunately, he is not in a financial or credit-history position to do that, so he called me to see if I had any advice.

First, let me state (as I have many times before) that I’m not a lawyer and can’t give any legal advice on matters like this. I did do some quick research and basically found that there are few options available in situations like this. One of the best opinions on this topic that I found was this one from Peter Boyle, a Minneapolis Mortgage Broker in response to a blog post –

Peter Boyle, Mortgage Broker or Lender, Minneapolis, MN

To remove your girlfriend from title and the mortgage you really have 3 options:

1. You could attempt to Assume the mortgage in your own name if it is an FHA loan as all FHA loans are assumable with qualifying. You would need to call your current lender to request and complete an assumption package, which is basically a full mortgage application. Bear in mind that you would need to qualify on your own income for the full mortgage payment for this to be successful.

2. You could refinance by yourself, again qualifying under your own steam, or have another family member replace your girlfriend as a Non-Occupying co-mortgagor.

3. You could sell the home

If none of these are feasible you could:

4. You could leave her on the mortgage, have her Quit Claim her interest to you and create a paper trail, documented with 12 months’ worth of canceled checks, that you are making the payments without her help. In that case she would be eligible to buyer another property and we would not need to consider your mortgage payment against her in the debt ratios. (Ed. Note: Peter is a Mortgage Broker, so this is his advice if the ex- wants to get a new mortgage for another place)

Peter Boyle
(612) 701-6816

So, the bottom-line answer is that there is no easy way to do that. Many people get into these situations because they have had some credit issues in the past and can’t afford to buy a house by themselves or based only upon their credit. The issue that often remains when things go awry is that you still can’t afford to buy-out the place on your own. Both of your are kind of screwed in that case, because the ex-whatever has this lingering obligation on their credit record that usually would prevent them from obtaining a new mortgage on a place that they might want to buy; and, of course you still have this vestige of your past officially sharing responsibility for the mortgage on your home (even if they haven’t paid a penny in years).

You could lawyer-up and try to do something about it, but the result will probably just be that the

lawyers make some money and you are still hosed. You need to find a way to refinance or you need to get out from under that old debt too by selling. You can’t have your cake and eat it too in this case. Hopefully the soul-mate that you have since found and married will understand and stay with you on this; otherwise you may have double-trouble. In Michigan at least, the wife in this case would need to sign-off on any sale because she has dower rights to whatever interest her spouse has in the property.

There’s just no way to put enough lipstick on this pig to make it look attractive. The best advice is just DON”T DO IT! Don’t buy a house with a boyfriend or girlfriend, even if you are engaged to be married, soon. The obligations that you take on when you do that may far outlive the engagement and the relationship. If you absolutely must go ahead, then have a clear and binding pre-nuptial agreement in place that spells out what must happen, and when, if the relationship shatters. If neither party could really afford to buy out the other's interest if things don't work out then DON'T DO IT!