First, it's hard enough dividing property among married couples, so dividing property among unwed couples would be extremely difficult and complicated. I'm going to err on the side of assuming that, basically, your boyfriend is a decent person who truly wants to help you in your home purchase, and also understands now may be the best time to do that in California. As such, he wants to protect his downpayment and investment in your home by requiring that his name be placed on the deed. This way, if you should default on payments to him or to the mortgage company, if there is any money left, he would be entitled to the fees. It is only natural that if someone invests a large sum of money in another person's home that the best protection is to be named as a co-owner.
Now, the bad news...
As the other Realtors have mentioned, if there are two owners for the property, the property cannot be refinanced or sold without the consent of BOTH owners. If, for example, you've decided to move out, sell the home and payoff your boyfriend, and he does not agree, you cannot execute any listing or sales contracts to leave the property, and can, in essence, be held captive until the other owner agrees to sell. If you have any foresight that he may be difficult or present problems if you want to sell, then he should not be on title with you.
Also, determining how much "ownership" to give could be a problem. If you purchase a home at say $100,000 and he gives you $10K for a downpayment, would he be happy to accept only a 10 percent stake of ownership in the home? Probably not.
My suggestion is that you talk with a qualified mortage broker to determine how much home you can afford, and the funds you'll need to put as a downpayment and to cover closing costs. As you are first time home buyer, the FHA (Federal Housing Authority) provides loan programs to first-time home buyers with FICO scores over 620 and a down payment of 3.5% of the sales price. If you can qualify for these programs, it would make a home purchase possible without help from any other source.
Whenever possible, for maximum control of your own financial well-being, it's best to keep your money separate from those of boyfriends and family members.
Good luck in your house hunting!
Grace Morioka, SRES, e-Pro
Area Pro Realty
San Jose, CA
Next, buying a home is serious business and should you and your significant other split up, once he is on the deed with you, he may receive 1/2 of your equity, not just the return of the downpayment he provided. When you purchase a home with a mortgage, you are responsible for repayment of the mortgage. Does he want to be on the mortgage as well? If he is offering to be on the deed only, I would think twice and definitely seek legal advice. Hope this is useful to you. Good luck!
Here is a flyer and needs list to gather for processing a loan approval.
HF Access half percent down flyer, pdf
Sheryl Arndt, standard needs list checked, pdf
Why Rent brochure
CHF Access income limits http://tinyurl.com/8lzf8he
Sheryl Arndt, Real Estate Broker â€“ Sr. Loan Officer
REO & Short Sale Specialist
20+ Years Experience
You sound too smart to fall for this!
If he wants to help you with your down payment why not sign a note to repay him the amount he loans you? There is no need to put him on the deed. The bank is going to loan you a lot more money are you going to put the bank on the deed?
Also, there programs that offer downpayment assistance for first time buyers, and guess what? You will not have to put the organization that helps you on the deed.
Go to HUD.GOV for details on down payment assistance programs. The state of California also has a down payment assistance progarm called CalHFA. Go to CalHFA.CA.GOV for details.
Best of Luck to you.
Kawain Payne, Realtor
It sounds like you already know what is right. But just in case you consider doing it, you should consider some of the following: who is obligated to pay the mortgage each month?, who is obligated to pay the property taxes?, who gets the tax writeoff?, what if he decides to move in to his new home?, what percentage of future equity does he get?, what if you find yourself upside down with the mortgage - will he forgive the invest funds?, etc. Also make sure that you don't need to refinance in the future, because again you would need his consent.
You are really in a partership and he is not on the mortgage so you have the debt.
If you have a good relationship and you want to do it draw up a contract that it is a no interest loan
payable upon the sale of the home, that would be ok.
Make it a note. Don't put him on the deed you will be stuck with him.