Considering purchasing a new home before marriage? Sounds great, but a few things to consider. It’s very likely you will need a mortgage on the new home. Are both of your names going on the mortgage? If only one name is on the mortgage note, do you plan to take all the mortgage interest tax deductions on your own? If your significant other wants those tax deductions, s/he will have to be added to the deed of trust that you have with your lender. A taxpayer cannot take deductions for mortgage interest unless the taxpayer is obligated under a secured deed of trust, which means that the document must be recorded where the property is located. There are other tax implications as well. For example, if you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income if you are SINGLE, but up to $500,000 of that gain if you file a joint return with your spouse.
If one party is contributing towards the house payments, but is not listed on the deed, you should consider a cohabitation property agreement as the situation could get dicey.
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