Buy a house without a spouse?

December 14, 2012 4:54 PM

Buying a house while married but physically separated -- what are the possible issues?

I am physically, but not legally, separated from my spouse and living in our jointly owned home while he rents nearby. He'd like to buy a house and with his income, certainly could do so. We both have excellent credit and no debt except for our current mortgage. He makes more than double what I make and helps with our mortgage knowing that, in five years, I will either sell or owe him the equity in the jointly owned property. There is no chance of reconcilation between us but it is very much an amicable situation. We are staying married, but separated, because his healthcare plan is so excellent and cheap. Can we refinance our current property (the one I'm living in) while simultaneously allowing him to buy a new home on his own while staying married on paper? I need him to re-fi the loan (streamlined VA) because I couldn't qualify with just my income. What are the ramifications/issues for this second property he would be buying? By that I mean would he lose some tax benefit since, on paper, I assume he'd need to declare our current home his primary residence. Would I have to be on the title or could he be the outright sole owner? We'd both be willing to enter into private agreements that would allow for each of us to have our own residence and minimize the tax implications and any unnecessary process/burdens for our spouse.

posted by anonymous to work & money (5 answers total)

Some of this depends on your jurisdiction. You might want to look into post-nuptial agreements for some of the contract language specifying rights and obligations (especially financial) found in separation/divorce agreements without the actual seperation/divorce. A session with a lawyer would not cost much and would make sure you are making informed decisions.
posted by saucysault at 5:02 PM on December 14, 2012

Yes, lawyer. At least in NY, my friend was told that under no circumstances was he to buy anything major until the divorce was finalized.
posted by snickerdoodle at 5:35 PM on December 14, 2012 [1 favorite]

Lawyer lawyer lawyer lawyer. Before you agree to, or heaven forbid actually sign, anything.
posted by SMPA at 8:25 PM on December 14, 2012

Nthing lawyer, but I've got to add - if he makes twice what you make and you're staying married because of his benefits, it seems that you're both living in a bit of financial denial and/or relationship denial. What happens down the road if either of you want to remarry?

Is the house you're living in now affordable on your income? If not, how would you pay him the equity you say he's building up? I'm not saying you owe it legally, because while you're still married these assets and debts are joint. But it could lead to resentment down the road, even if both parties are disposed to be amicable.

If the current house fits his income more than yours, what about letting him have it and you buying or renting somewhere else?

Not saying this to be "team ex-husband" - I don't know either of you. Just pointing out a potential elephant hanging from the chandelier in the foyer.
posted by randomkeystrike at 6:10 AM on December 15, 2012 [1 favorite]

Yeah, if either of you wants a chance at a new relationship you are going to have to financially untangle. Your plan would introduce new tangles, not undo them! If it's just a matter of delaying divorce for a few months, fine. But if your plan requires ongoing financial and legal relationships, any future serious partner is going to be wary.
posted by yarly at 7:14 AM on December 15, 2012