It is an exciting time when you move in with a partner, one that should be the epitome of happiness. However, organizing cohabitation is more complicated in practice, especially if either one of you already owns the home and makes payments on a home loan. The question of whether you should refinance is a part of the bigger question about how you will share ownership and financial responsibilities in general.

The Hazards Of Taking Turns

Taking turns in paying for life’s necessities in cohabitation leads to two parts of one problem: One or both partners soon start to keep a tally of who has paid for what. The solution for this is creating one shared bank account from which all costs of living and shared expenses come with both partners making a predetermined monthly contribution based on a budget that you work out and review together. Like your bank account, you will find that sharing the home you occupy is a tricky proposition, dependent on your circumstances and your state’s real estate laws on shared ownership.

Cohabiting As Homeowners

When you commit to co-ownership, you need to have a clear understanding of each other’s financial position going into the relationship. Do you know your partner’s current credit situation? Deciding whether you should refinance your home with your partner comes as part of the process of deciding how you should share everything. It is something to settle before you start making final choices.

So, what do you do when one partner owns the home already? If the other can afford to match assets and equity and borrowing ability, then the simplest solution might be to refinance as equal partners, both bringing cash and financial clout to the shared home.

If there is an imbalance in assets, then it becomes more complicated and yet in the eyes of the law, both partners might be entitled to an equal share of the property. The solution could be a cohabitation agreement, very much like a wedding prenuptial agreement, a contract that declares the assets brought to the partnership by each side and which return to each partner, should the relationship end.

Getting On With Your Lives Together

Real estate is a concept that is defined very clearly in the laws of the land, and each state has its particular histories legal precedents and legislation. The more closely you study the subject, the more complicated it becomes and it has become a specialization in the law that captures entire careers and specialized law firms.

As unromantic as it might seem, getting legal advice before you commit to moving in together is a prudent course of action. However, homeownership is a part of life, and domestic partnerships are a reflection of legal ones. If you can get past the legal formalities and settle in, as many couples do, you can have the domestic bliss you are seeking with all the comforts of owning your home.