Buying a Property Without Your Spouse – Benefits and Drawbacks

While it might seem like a highly unromantic proposition, there are situations where it can be beneficial to purchase a home without your spouse. For instance, maybe your spouse has lots of debt or poor credit, which can dramatically lower your mortgage options. Even assuming that you and your partner’s finances are rock solid, meaning there’s no need to keep one of you off the mortgage, there can also be good reasons for having only one name on the property deed.

Ultimately, there is no one-size-fits-all answer to a question like this. As with most things in real estate, each approach has pros and cons, and whatever decision you make will largely come down to your particular circumstances. To help you decide, this post will take a broad view of what needs to be considered when buying a home without your spouse.

Can I Buy a Home Without My Spouse in NYC?

You sure can! Unlike some states, New York State is not a community property state, meaning that any assets you gain during marriage do not need to be jointly owned by both spouses. That said, you will need either a prenup or a postnuptial agreement to allow you or your partner to purchase a property individually. In addition, the funds used to buy the property must also be separately held.

At the end of the day, a property is just like any other asset. Therefore, it shouldn’t be that big of a deal to own property separately from your spouse. That said, a proposition like this is still something you’ll want to discuss carefully with your spouse to ensure you’re both on the same page, especially if the separately owned property isn’t an investment property but a home that both you and your spouse will live in.

Benefits of Purchasing Property Without Your Spouse

So, why would you want to purchase a property without your spouse? Well, there are quite a few good reasons.

For a start, you might have a superb credit score and many assets, while your partner has little to no assets and terrible credit. In a situation like this, it’s very common for the spouse with better financials to purchase the property separately, as it will mean an easier time getting a mortgage at a good rate. You may even be able to add your spouse’s name to the property deed after the mortgage is finalized, meaning both of you will be co-owners of the home. However, you could have difficulty finding a bank that will agree to this, as most banks prefer for everyone on the property deed to also be a co-borrower.

Another reason is that you may want to keep the property safe from creditors. For instance, maybe your spouse has defaulted on a major loan before your marriage, or they have an underlying medical condition that could lead to costly medical expenses in the future. By keeping your spouse’s name off both the mortgage and the property deed, you can ensure that creditors won’t come after the property.

Lastly, keeping your spouse’s name off the mortgage and property deed can greatly simplify things if you wish to sell or bequeath the property later down the line. This can be smart if you’re purchasing the property with the money you received from an inheritance before your marriage. Perhaps you wish to leave the property to a child from a previous marriage after you die, or you want to maintain control of the property if your marriage heads south.

Drawbacks to Purchasing Property Without Your Spouse

Every benefit has a drawback, and it’s well worth considering these drawbacks if you’re thinking of purchasing a home without your spouse.

For one thing, owning a property separately from your spouse can make it more difficult to grow your financial future as a couple. Having jointly owned bank accounts and assets can seriously boost your financial position, providing more opportunities for bigger investments in the future. You won’t be able to achieve that financial growth to the same degree if you and your spouse keep all your assets and finances separate.

Keeping your spouse off the mortgage but on the property deed can also cause some issues. For instance, the spouse whose name is not on the mortgage has no legal responsibility to help with mortgage payments, which can strain a marriage if financial difficulties arise. Things can get even worse in the event of a foreclosure, as only the mortgage owner’s credit will be damaged.

Finally, there’s the issue of homeowner’s associations (HOAs) and condo boards. If you and your spouse live together, but only one of you is on the property deed, the HOA or condo board will only want to talk with whoever’s on the deed. This can be a hassle as it means your spouse can’t speak on your behalf or attend board meetings when unavailable.

You May Need a Quitclaim Deed

If you do decide to purchase a property without including your spouse in the property deed, you will almost certainly need your spouse’s consent if purchasing with the help of a mortgage. Most lenders require spouses to sign a quitclaim deed, a legal document in which the signer declaims any interest in the property. Lenders often require a quitclaim deed to protect themselves against any future title disputes. If your spouse refuses to sign, this can end any hopes of owning a property separately from your spouse. Quitclaim deeds also mean that there is no way for you to purchase a property behind your spouse’s back without them knowing.

Final Thoughts

It may not make for the most pleasant dinner conversation, but there is really no reason why a married couple shouldn’t consider purchasing a property separately. Just try to approach the subject from a financial perspective, arguing why it makes good financial sense. Who knows, perhaps they’ve also been considering this subject.