The National Association of Realtors says unmarried couples buying a home together are the second fastest growing segment of American home buyers. In 2007, unmarried couples accounted for 7 percent of all home buyers. Their average age was 32 years old, which makes them the youngest of all first-time home buyers.

Whether it's the economy or just changing times driving those numbers, it's important for all parties involved to remember that the mortgage changes the partnership from strictly friendship or romance to a business one. What do both people need to think about before they tie this particular knot?

Photos by CHRISTOPHER OQUENDO / Special (ENLARGE)

Marin Stephenson and Dan Kraushaar decided to quit renting separate places and pooled their money to buy a house in Kennesaw that's big enough to grow into.

(ENLARGE)

Chris Gorman (left) bought a bungalow in Virginia-Highland in 2003, and he added partner Mark Seib to the title when they decided to remodel three years later. On the deed, they are joint tenants with rights of survivorship.

(ENLARGE)

Michelle Fini (left) and Kristy Llewellyn ditched their condo in the city for a spacious house in Buford.

Buying with an eye toward the future

Marin Stephenson, 28, and Dan Kraushaar, 30, were neighbors in a Marietta apartment community. "We were each paying a little over $1,000 a month, throwing all that money away on rent," says Stephenson. "Interest rates were dropping and it seemed like a good time to buy. We were in a pretty serious relationship, thinking about getting engaged, so we thought we'd combine our rent money and put it toward something that would be ours." Kraushaar says, "We started looking for a home in a good school district for Marin's 8-year-old daughter.

Financing

The couple applied jointly and was preapproved for up to $400,000. After looking at the payments, they decided they felt comfortable looking in the $200,000 to $300,000 range. "We knew what we felt we could pay each month, and we also knew we wouldn't have been able to afford the type of home we had in mind if we'd had to depend on only one income," says Stephenson. "We still have separate checking accounts and all of our finances are separate."

Planning for the future

Kraushaar says, "We had talked at great length about wanting to move to the next level in our relationship. We knew that buying a home together would give us an opportunity to look at how we would handle different situations and how we could function together as a family."

What they bought

"We hoped this would be permanent for us, so we looked for a home with our future family in mind," says Stephenson. The couple found a four-bedroom, three-bath traditional-style home in Kennesaw, built in about 2002. "The open floor plan sold us on the house, and we liked the nice flat backyard and that we're close to shopping, restaurants and the interstate." They moved in last December.

The future

Kraushaar says they've looked into how they'll cover the mortgage if something were to happen to one of them, and they have a meeting with a financial adviser soon. His advice? "Do your homework about the mortgage you're getting into and play out a multitude of scenarios about what could happen to either of you."

And a wedding

Stephenson, a marketing manager for Georgia's Own Credit Union, and Kraushaar, a physical therapist with Emory Sports Medicine, got engaged after they bought the house and were married on August 2.

BUYING A HOME TOGETHER CAN BE A WIN-WIN

Tighter credit regulations are bringing more people together to invest in houses. They can put down a larger down payment and can both get a tax benefit, says Diana Sauvigné of Prudential Georgia Realty. "It works as a win-win for everybody. Usually they have more money to put down, therefore they may be able to go in with an 80 percent loan with a lower interest rate and lower monthly payment. ... And now both people may be splitting all expenses as well as the mortgage payment."

Sauvigné suggests that her clients talk to an attorney or a financial adviser to write up an agreement on how to handle things like one person wanting to leave the home before the other one does, or if they sell the home.

"Are they 50/50 in the house? Sometimes the split is different depending on how much equity they brought to it," she says. "Deciding what will happen if one person wants to stay in the house and buy the other out is also important. It's just good to get all these decisions made up front and in writing so there are no questions later on."

Home makeover brings new financial, legal commitments

In 2003, Chris Gorman, 40, who works in communications with the Coca-Cola Company and owns Christopher Gorman Photography, bought a Virginia-Highland bungalow. Three years later, he and partner Mark Seib, 39, a real estate lawyer with Ganek Wright Minsk PC, began a renovation of the house, expanding the first floor and adding a second.

The legal side

"We took out something called a 'construction–perm' loan. We had only one loan, which encompassed both a one-year construction phase, and a permanent phase for the remainder of the 30-year term," says Seib. "When we closed on the loan, Chris signed the deed to add me as a joint tenant with right of survivorship.

The financial side

"Chris and I set up a household account where we both deposit money every pay period. All the household bills are paid out of the joint account, and then we maintain separate checking accounts.

Planning for the future

"Chris and I have life insurance and disability insurance, so that no matter what happens to one of us, the other can stay in the house. The mortgage payment would be a significant burden for either one of us alone," says Seib. "If you want to be sure your partner inherits your interest in the real estate, either have joint tenancy with right of survivorship or have a will in place."

Another piece of advice

Seib often provides a co-tenancy agreement for his clients, a legal document which makes plans for the mutual ownership and perhaps future sale of the properties. "For clients who co-own real estate, like friends who buy an investment property together, I almost insist they have such an agreement. It's not a bad idea for any partnership, but when making the financial commitment with Chris on this house, although I thought about it and as a closing attorney, I know it's a smart thing to do, from a relationship perspective, we decided it wasn't necessary for us."

WHAT WILL HAPPEN IF THE PARTNERS BREAK UP OR ONE DIES?

Attorney Allison McDonald says about half her practice is estate planning and about a quarter of her clients are same-sex couples. She offers these suggestions to help her clients plan for their purchase of a home.

Having a will is always a good idea, but you can protect both parties' interest in the house with some simple language in the deed. If both parties are going to be on the title for the property, have the deed made out with both parties named as joint tenants with right of survivorship. If one party dies, all his/her interest will go to the other party.

If the deed doesn't have this language, and you die without a will, the state of Georgia will give your share to your heirs, which would be your parents, siblings, and/or children.

Even if only one party is qualifying for the loan, the deed can still contain this language. Check with your mortgage company to see what their policy is.

Consider drafting a domestic partnership agreement outlining what each party is responsible for. This is a great way to help plan your financial arrangements and think about all the costs involved in owning a home. Include things like who will get the pets and the artwork. It may not seem like the most romantic thing in the world, but it will better reflect your true wishes than the decisions you'll make if you are caught in the negative feelings of a breakup.

From downtown condo to Hall County ranch

Michelle Fini, 28, and Kristy Llewellyn, 29, have been living together for more than seven years. "About four years ago we decided we wanted a place downtown and bought a unit at Spire while it was under construction," Fini says. "One of my sergeants lived at the Metropolis," says Llewellyn, the defensive tactics coordinator for the Gwinnett Police Department. "I saw his condo and fell in love. We felt comfortable with the decision financially, and we had both names on the title."

Time for a change

"Both of us work in Gwinnett," says Fini, who runs a family-owned Italian restaurant, "and to be honest, downtown living wasn't all we had thought it would be. I turned to Kristy one day and said, 'let's find a house.' Maybe we're extremists because we went from a downtown condo to a single-family home in Buford. We wanted something with a beautiful backyard and a little more space."

Selling their condo

"We were lucky, even in this market. Our agent, Doug Neal of Coldwell Banker The Condo Store, did a fantastic job. We were the last of 52 units to go up for sale in the building when we put ours on the market, and we were the first unit to sell," says Llewellyn.

What they bought

The couple bought a ranch house with a full basement. It backs up to Hall County green space and is adjoined by a working railroad along the back, so there will be no building right around them. The house has three bedrooms and two baths, a bonus room they turned into a formal dining room and a pool room/entertainment center where the original dining room was planned. "We are 100 percent happy with this house," says Fini. "It's everything we wanted with all the upgrades we had in mind." They've been in their new house since January, and again, the title is in both names.

The finances

"We split everything 50/50," says Llewellyn. Fini adds, "We have an account for the house and each of us puts X dollars in each month to cover all the bills. We exceed the minimum so we have a little cushion. We're working our way toward having six months worth of expenses saved. If one of us were ever to lose our job, we might have to make cutbacks, but one of us could carry the house alone."

The taxes

"The taxes have been the only headache. Every time we go to file, our wonderful accountant has to do the taxes several ways to see which of us should claim the house to get the better refund," says Fini. "Last year I filed for the deduction, this year it was Kristy."

LAYING BARE YOUR FINANCIAL HISTORY

Randy Gibson is a mortgage loan consultant for SunTrust. Of processing loans for couples that are planning to be married or for same-sex couples who can't legally get married, he says: "Most of the time both parties are going on the title and using their income and credit to qualify together. They're often pooling their money to make at least the minimum 3-5 percent down payment required by most loans these days."

Gibson says qualifying for the mortgage is the same whether the two parties are married or not. "We're not allowed to discriminate based on marriage or any other factor. The underwriter will base their decision on the parties' past financial history."

He says that the loan process requires full disclosure, and sometimes the couple isn't prepared for that. "Applying for a mortgage means your past credit history will be exposed. The thing the couple needs to realize is that when the process is over, they're going to know a lot about each other's financial situation. And remember that the full debt you're incurring with this mortgage will go on both credit reports. Both parties will be jointly responsible for the liability. And they need to remember if they split up that the only way to be free of the debt of this mortgage is for the mortgage to be refinanced. Otherwise, it stays on your credit report."

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