5 Ways for Same Sex Couples to Prepare to Own Their First Home

Many same sex couples make the mistake of not preparing before purchasing their first home. The result is unexpected delays and disappointments. Following are five ways for same sex couples to prepare to own their first home.

images1. Calculate the Cost of Owning a Home

The first step is to determine how much home you can afford. You can do this by applying for preapproval from a mortgage lender. Before applying, it would be wise to obtain a copy of your credit report from one of the major reporting agencies and checking to be sure that is no inaccurate information included. If there are inaccuracies, contact the reporting agency to have it corrected before applying for preapproval. Note that the major credit reporting agencies are required under the Federal Fair Credit Reporting Act to provide individuals a free copy of their report once per year.

2. Open a Savings Account

While you are searching for your home, it would be wise to save, or add to your savings, the money needed for your down payment and for necessities that you will need once you move in. Necessities may include a lawn mower, new furniture or other items that you would like to personalize the home. You will also want to save some funds to pay for emergency repairs that may occur once you move in. For example, the furnace may go out or your roof may start leaking. It is important to have the funds on hand for those types of repairs should they arise.

3. Organize Your Financial Information

Before applying for preapproval for a home mortgage, you should make sure that you have all of the documents at hand that may be needed. Generally, lenders require your previous year tax returns, statements from your savings and other accounts, and your latest pay stubs. Organize those documents and take them, and any other documents the lender you choose might require, with you when you go to apply.

4. Understand Mortgage Loans

There are a number of options available to low and moderate income buyers to obtain a mortgage, including conventional, Federal Housing Administration (FHA) and Veterans Administration (VA).

Conventional mortgages are those that are not guaranteed by a government agency. These types of loans generally require more money down and somewhat strict credit requirements.

FHA guarantees loans from qualified lenders resulting in more flexible lending practices and lower interest rates.

VA loans are guaranteed by the Veterans Administration and obtained through qualified lenders. These loans do not require a down payment, but do require a funding fee of approximately one to three percent of the loan amount. VA loans are available to service members and veterans, spouses and other eligible beneficiaries.

Note that the above is a sampling and are not the only mortgage options available.

5. Develop a Perfect Home List

Make a list of the type of home that you would like to purchase and what it should include. For example, would you prefer a ranch, Cape Cod or an old farmhouse? Would you prefer that it has a garage, a small lot or acreage or a specific type of location? Once you have made your list, you should prioritize it. List the things that you must have at the top of the list. It is unlikely that you will find a home that has everything on your list so you should be prepared to be flexible. If you find the perfect home but it does not have some aspect that you wish, perhaps it is something that you can add once you move in or you may determine that it is not that important considering the other benefits of the home.

Once you are prepared, it would be wise to seek the assistance of an LGBT real estate agent at GayRealEstate.com. He or she will have the expertise to guide you through the home buying process and answer any questions that you may have.

Home Buying Tips for Same Sex Couples

When same sex couples purchase a home, there are some legal protections that can be put into place to protect their children in the event one or both of them die. The protections that would be best for you will depend on your particular situation. Following are some of the options that are available, depending on the state that you live in.

Types of Ownership

When you purchase a home, you can choose how you want to take ownership. Following are some of the choices that are available.

imagesJoint tenancy with right of survivorship means that you will both own and use the home equally. When one of you dies, your partner will automatically own the home. This may be an option if you are both parenting the children and the surviving partner is a legal guardian and will continue to care for them after the death of the partner.

Tenancy in common allows each of you to will your share of the home to anyone you choose, including your children. In order to protect your children with this option, you can create a will making them the beneficiary upon your death.

Sole ownership where the home is owned by one of you rather than both is an option. The legal guardian of the children could purchase the home in his or her name and will the home to the children. The problem with this option is that the partner whose name is not on the home will not legally own any interest and will have no rights should you breakup or die unless you have created a will that includes them.

Wills

Creating a will allows you to distribute your assets to anyone that you choose. To protect your partner and your children, you can include them as the beneficiary of your home and any other assets that you choose.

If you die without a will, your estate will be distributed according to the laws in the state that you live in. Most states dictate that the estate is distributed between the spouse and the children, or to the children if there is no spouse. In the case of same sex couples who are not married or in a legal relationship, the home would be distributed to the children only if they are their natural children or are adopted. This means that if the children are the natural issue of one of the partners in a same sex relationship and the other partner dies, his estate would not go to the surviving partner or his or her children.

Estate Planning

Most people choose to create a will as well as selecting the home ownership option that works best with their particular situation. There are also other estate planning options available that can be used to protect both your partner and your children in the event of your death including revocable living trusts.

Real estate and estate planning laws vary by state. It would be wise to consult with a real estate attorney who is familiar with LGBT issues when considering the options available to you and your same sex partner.

If you are in the market to purchase a home, you should hire an LGBT real estate agent at GayRealEstate.com to assist you. He or she will help you find the right home and protect your interests throughout the home buying process.

LGBT Community Integrating Into the Suburbs

In our previous articles, we noted that LGBT individuals and couples had spread throughout cities including Minneapolis, Chicago and Phoenix rather than staying in designated LGBT neighborhoods. Since those articles were published, Amin Ghaziani released a book “There Goes the Gayborhood” that includes his research into LGBT demographics. Ghaziani is a respected sociologist at the University of British Columbia.

downloadGhaziani found that, like all neighborhoods, gayborhoods change. LGBT households are moving out and straight’s are moving in. He noted that “…LGBT people, in greater numbers than ever before, are living their lives outside the boundaries of just one neighborhood in the city.” Ghaziani found that same sex households were found in 93 percent of all of the counties in the United States. One of the main reasons, according to Ghaziani, is that “…many LGBT people feel culturally similar to their straight neighbors” and straight people are more tolerant than in the past. He notes that “[t]he rapid rate at which sexual minorities are blending into American society represents the most impressive civil rights triumph of our generation.”

Activists and LGBT organizations can be credited with the integration of the LGBT community into straight communities and vice versa. Because of their influence, Section 3 of the Defense of Marriage Act was ruled unconstitutional in United States v. Windsor, opening the door for the federal government to recognize same sex marriages and allow those couples to receive the same federal benefits as opposite sex married couples.

Currently 19 states recognize same sex marriages: California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, new Hampshire, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont and Washington and the District of Columbia. Court cases are pending in a number of other states seeking to legalize same sex marriages. As same sex marriage laws are enacted and lawsuits are fought in courtrooms, the American public has been made more aware of LGBT issues and have become much more tolerant. They are seeing those in the LGBT communities as real people, not just a label for people that do not fit into their straight lifestyle.

Gayrealestate.com feels that the bottom line is that LGBT people want the same benefits in a community as their straight neighbors: safety, good schools for their children and friendly neighbors. Acceptance of the LGBT community has taken major strides in recent years and promises to continue to do so in the future.

Home Buying and the Big Gay Merge (moving in together)

Buying a home and moving in together is an exciting time in your life. The process of home buying and moving in together can be stressful and can cause tension in your relationship. The following tips on home buying and the big gay merge can help you reach your goal while enjoying yourself along the way.

Couple1. Work out your finances. Have a discussion about your income, debts and credit history. A review of your finances can help you decide how much you can afford to pay for a home.

2. Work out a budget that includes your anticipated mortgage payment, taxes, insurance, utilities and other household expenses. You should then decide how much each of you will contribute to the household each month. You should also decide how much each of you will contribute each month to a slush fund to be used for emergencies.

3. Set up joint checking and savings accounts. The checking account should be funded with each of your agreed upon contributions each month and used for paying household expenses. Your slush fund contributions should be deposited into the savings  account and used for emergency household repairs and for saving to meet your future goals. Note that you can have the account set up as “and” if you want both of you to sign the checks, or “or” if you want either one of you to be able to sign the checks or withdraw funds. For example, John Doe and Jim Doe, or John Doe or Jim Doe.

4. Put it all in writing. During this exciting time, you may not feel that you need to put anything in writing because you are confident in your relationship. The reason that you need to do that is to make you both feel more comfortable with your decisions. It’s mainly for dispute resolution. It will not be legally binding unless, according to law, unless there is an offer from one party to provide money, goods or perform a service and an acceptance where the second party is agreeing to provide money, goods or perform services in return. For example, one party offers money in return for a service, such as remodeling your home. Your agreement will eliminate any arguments over who was supposed to do what.

Draft a domestic partnership agreement that includes each partner’s responsibilities and what will happen to the house and joint property if your relationship does not work out. You can add to the agreement as additional issues and decisions are made.

5. Hire a real estate agent to help you with finding and purchasing your new home. An agent who specializes in working with LGBT couples will have a better idea of what your needs are and will make you feel more comfortable being yourself. In addition, hiring an LGBT agent that you trust can help relieve much of the stress involved in purchasing a new home together. He will discuss the steps involved and assist you throughout the entire process. For more information, see our article Top 10 Reasons to Hire a Gay Realtor for your Home Purchase.

The steps listed above are designed to help you get started with your goal of home buying and the big gay merge. An experienced local LGBT gay real estate agent can discuss all aspects of purchasing your new home with you.

Legalities of Gay Marriage and Buying Your First Home Together

The legalities of gay marriage and buying your first home together vary depending on factors including the state that you live in. If you are married and live in a state that recognizes same sex marriages, the procedure for buying a home is the same as it is for heterosexual married couples. Those that do not live in a state that recognizes their marriage will be forced to purchase their home as individuals rather than as a married unit.

imagesOnce you have found a home you would like to purchase and have worked out the details, you will need to complete a legally binding purchase agreement. That document includes the price and the terms of sale that are being agreed upon, specific property information including any known defects, contingencies and the names of all parties involved including buyers, sellers and agents. Contingencies are conditions that must be met before closing and can include a home inspection, financing and other specific actions by either the buyer or the seller.

The seller is legally required to disclose any defects in the home. Defects may include termite damage or plumbing, heating and air conditioning and electrical problems. Although not legally required, it is best to have a home inspection completed before you purchase the home. It is not unusual for sellers to overlook or have no knowledge about a defect of the home that an inspection will uncover. Licensed inspectors are trained to find and disclose current and potential future problems.

As part of the buying process, you will need to purchase title insurance. The title insurance company will conduct a title search on the property to make sure that there are no liens or easement issues against the property that have not been disclosed.

Once those procedures are complete, if you have not already done so, you will need to find a mortgage lender. The mortgage company that you choose will check both of your credit scores and will count both of your incomes in making a decision. It would be best to shop around to find the best terms available based on your personal and financial goals.

According to the Human Rights Campaign, there are no federal laws that prohibit discrimination against same sex spouses, but some states do have expanded laws in place. Knowing the laws in the state where you live will help you avoid discrimination based on your sexual orientation. If you live in a state that recognizes same sex marriages, mortgage lenders should recognize your marriage and, if you qualify, allow you to obtain a loan as a married couple rather than as separate borrowers on the same loan. The lender should also give you comparable interest rates to other couples with similar credit scores and income qualifications.

The legalities of gay marriage and buying your first home together are complex and can be confusing. Hiring a local LGBT friendly real estate professional at GayRealEstate.com will help take the stress out of buying your new home. They have the knowledge and expertise to help you make informed decisions that are in your best interest, negotiate on your behalf and ensure that no legal documentation is overlooked throughout the process.

Exploring Forms of Home Co-ownership for LGBT Unmarried Couples

The forms of co-ownership available to unmarried LGBT couples include joint tenancy and tenancy in common. Note that while tenancy by the entirety is a common designation, it is only available to married couples. When you put both your names on a deed, you must designate the form of co-ownership that is best for both of you.

Gay Realtors Can HelpJoint tenancy automatically gives ownership of the property to the surviving partner when one of you dies. In some community property states including California, the term ‘with right of survivorship’ must be added to the joint tenancy designation to ensure that the parties intended the other party to inherit. The right of survivorship overrides any attempt to change ownership including a will. When one partner dies, there is no remaining interest to give to anyone else because all interest in the property automatically vests in the surviving partner. Both partners will have an undivided equal ownership, share equal rights to possession of the property and cannot finance or sell the property without both parties consent.

Tenancy in common property can be owned equally or with unequal shares of the home. For example, one partner could own 60 percent and the other partner 40 percent. Each partner will have the right to sell or will all or a percentage of his interest in the property to a third party. If one of the partner’s die without a will, his percentage in the property will be distributed according to intestate laws in the state of his residency.

If you own a home and decide to put your partners name on the deed, it should be kept in mind that by doing so, you are giving a gift of some percentage of the home to your partner. You will have no legal right to remove or force your partner to deed the property back to you. Adding your partner’s name to the deed could also trigger gift taxes, and could trigger the mortgage company to force you to refinance if there is a due on sale or transfer provision in the mortgage contract.

Before signing a co-ownership deed, it would be a good idea to prepare an agreement that details how expenses and ownership will be shared and what will happen to the home if you separate. While this may not seem important, if the relationship deteriorates, an agreement will help avoid major disputes.

Property laws vary between states. Always consult with a gay realtor from GayRealEstate.com or speak with a real estate attorney.

Dear Gay Realtor, My partner and I are getting married, do we need to do anything with the mortgage and home he owns individually?

You are not legally required to do anything with the mortgage and home that your partner owns when you get married. However, if legal arrangements are not made, you may not have a right to inherit the home if your spouse dies.

Dear Gay RealtorIf your name is not on the deed and no will has been made, his home will be inherited according to intestacy laws in the state that you live in. For example, since same sex marriages are not legal in Colorado, the spouse cannot inherit. In New Mexico, where same sex marriages are legal, New Mexico Statutes 45-2-102 dictates that the spouse will inherit his deceased spouse’s separate property if there are no surviving children and one fourth of the estate if there are surviving children.

If your spouse decides to add your name, he will need to file a quitclaim deed adding you as an owner of the property. When filing a quitclaim, you will need to decide how you would like to designate ownership. If you live in a state that has the designation, you could choose tenancy by the entirety. That designation gives equal ownership and transfers the ownership of the home to the surviving spouse when one of you dies.

Joint tenancy, or joint tenancy with right of survivorship in state’s that require that language, works in the same way as tenancy by the entirety. If you live in a state that requires the joint tenancy right of survivorship language and do not add it, you will own the property equally but you will not automatically inherit the home based on the deed.

The last option is tenants in common. That designation does not give right of survivorship. The deceased spouse’s half of the home will go to the person specified in his will or, if he had no will, according to the intestacy laws in the state where you live.

If you add your name to the deed but not the mortgage and your spouse dies, the mortgage holder may foreclose on the property if there are not enough funds in the estate to pay it off. Note that some mortgage holders include language in the mortgage contract that requires you to add your name to the mortgage before it can be added to the deed.

There are no legal requirements that a spouse be added to an existing mortgage other than what may be included in the mortgage contract. If you would like your name added, some mortgage companies may allow it and others may require that you refinance in both your names. If your name is added, you will both be liable for repayment of the mortgage.

The advantages and disadvantages of adding your name to your spouse’s existing house and mortgage should be evaluated before a decision is made. It would be wise to consult a real estate attorney who is experienced in LGBT law to find out what your options are and what would work best for your particular situation.

Dear Gay Realtor, Can I Add my Same Sex Partner to the Deed of my Home?

Adding your same sex partner’s name to the deed of your home is relatively simple. You would need to complete a quitclaim deed, have it notarized and file it with your county registry of deeds. Some states also require witnesses or your partner’s signature on the quitclaim deed before it can be filed. Although the process is simple, the consequences of adding your partner to your deed should be seriously considered before taking that step.

Gay Quit Claim DeedUnless you prepare a contract setting out your partner’s responsibilities in relation to making payments or other compensation for a share of the property, you are giving him or her a gift of a percentage of the equity in your home free of any legal obligations. Depending on the type of co-ownership that you choose when filing the quitclaim deed, your partner may have privileges including the right to obtain a security loan or to sell his or her share of the home.

The types of co-ownership that are available to same sex partners include joint tenancy, joint tenancy with right of survivorship and tenancy in common. Joint tenancy gives equal ownership to both parties. Joint tenancy with right of survivorship gives equal ownership and automatically passes ownership to the surviving partner when one of you dies. Tenancy in common allows unequal shares with no right of survivorship. For example, you can own 75 percent and your partner 25 percent of the home. When there is no right of survivorship, the deceased partners percentage of the home will pass to the person named in his or her will or according to the intestacy laws in the state of residency if your partner did not have a will.

Filing a quitclaim does not add your partner on your mortgage and he or she will have no legal obligation to make mortgage payments. If your home has a mortgage, you should check your deed of trust to ensure that adding your partner’s name will not trigger the mortgage holder to demand payment of the entire amount owed because of a due-on-sale or transfer provision. You can avoid this by asking the mortgage holder to give you written approval to add your partner. If they refuse, your options include paying the mortgage in full or refinancing in both of your names.

The information above includes some of the consequences of adding your same sex partner to the deed of your home. You should consult a real estate attorney who is experienced in LGBT law, or a gay realtor at GayRealEstate.com to find out more about the advantages and disadvantages for your particular situation.