Joint home ownership: Couples are combining assets to buy their first home
You’ve found your dream neighborhood, mentally decorated the dining room, and picked the perfect front door color. All that’s left to do now is find the house — and, of course, figure out how to pay for it.
As homeownership becomes a shared goal, more couples are choosing to merge their financial resources to make this dream a reality. The decision to combine assets reflects not only practical considerations, but also a deeper commitment to sharing goals and long-term planning together. Purchasing a home with your partner is a major milestone along the path to building a future together, and it requires teamwork, communication, and planning. Let’s take a look at the reasons to consider joint home ownership and learn how to best protect your purchase with the right insurance.
Modern-day cohabitation
More couples today than ever feel there’s no need to put a ring on it before buying a home together. The number of unmarried couples who live together has nearly tripled since 1996, increasing from 6 million to 17 million, or 7 percent of the total adult population1. Approximately three in five unmarried couples in the U.S. live with their partners; in fact, it’s more common today for young adults to live with an unmarried partner than with a spouse2. These statistics reveal cohabitation outside of marriage has become increasingly accepted by a broad swath of social and demographic groups1.
Reasons to consider joint home ownership
1. Affordability
When couples share financial responsibility for mortgage payments, property taxes, insurance, and other expenses, home ownership can become more affordable3 and attainable. Couples can combine assets to pay for closing costs, put down a bigger down payment, qualify for a larger mortgage, and purchase a home that meets their needs and preferences3 earlier than they could afford to do so alone.
2. Meet loan qualifications more easily
Merging finances can also help couples qualify for better loans by lowering their debt-to-income ratio, making it easier to borrow more money at better interest rates. Two incomes can contribute faster to accumulate savings, which couples can use to create an emergency fund or sock away savings to fund renovations or repairs.
3. Tax benefits
And if you’re first-time homebuyers, there are even more benefits to consider. Couples may qualify for tax benefits and incentives, such as the ability to deduct mortgage interest and property taxes on their tax returns3.
4. Strengthening your relationship
A study published in the Journal of Consumer Research found that sharing finances can result in improved financial harmony that goes beyond savings or convenience4. Couples who merge finances enjoy a better level of relationship quality due to improved transparency in communication and having more unified strategies and priorities4.
How to protect your investment
Buying a home is a substantial undertaking, so it’s important that you consider all potential implications. Couples may want to consult with a lawyer to understand the potential risks and benefits associated with combining assets to purchase a home. For example, if one party has debt or a poor credit score, it may affect the other party's credit score and ability to obtain financing3.
You’ll also need to ensure you have the right type and appropriate amount of insurance, including personal property and liability coverage, to safeguard against loss. Couples who cohabitate — even those who aren’t married or engaged — can have a joint insurance policy. Learn more about the benefits of combining coverage, then consult with your insurance agent to decide the best plan for you and your partner.
Joint coverage options for couples combining finances
When couples move in together, combining insurance policies can be a smart next step. Before you reach out to your agent, it’s good to know a few basics about combining policies.
Couples don’t have to be married to merge home insurance policies; anyone who shares a residence can opt for joint coverage. There’s no differentiation between unmarried and married couples, so unwed pairs can enjoy the same discounts and expanded coverage options as spouses.
Sharing costs with your partner to insure mutually owned assets makes good financial sense. It can help you save money, improve protection, and streamline the management of your insurance coverage5.
Valuables insurance and considering your other assets
Eventually, you and your partner may acquire a sparkly new asset by getting engaged. Or you may wish to signify your commitment with another memento. Regardless, it's important to protect your valuables with the appropriate jewelry insurance coverage5. While homeowners insurance will protect jewelry up to a certain value, consider purchasing additional coverage, such as Nationwide’s Valuables Plus or Protection Boost, to properly insure jewelry and other expensive items6. Talk to your agent to learn about options for special insurance coverage you can add to your policy to provide additional protection for high-value items.
Home ownership is a dream shared by many, including those who haven’t opted to walk down the aisle. Combining assets is not only practical, but it speaks volumes about the deeper commitment to shared goals and long-term planning that you and your partner are making. Talk to your agent to learn more about the benefits of combining assets to buy your first home together.