Two people can buy a house together whether or not they are married, related, or romantically involved. Federal and state property law recognizes several forms of shared ownership, called concurrent estates, that let any combination of individuals hold title to the same property.1LII / Legal Information Institute. Concurrent Estate The real work is in three decisions: how you take title, how you qualify for the loan together, and what you agree to in writing before closing.
How to Hold Title Together
The deed decides what each of you owns, what happens to a share if one of you dies, and how creditors can reach the property. Most states recognize three forms of co-ownership.
Tenancy in Common
Tenancy in common is the default in most states when the deed does not say otherwise. Co-owners can hold unequal shares, such as a 60/40 split reflecting each person’s contribution to the down payment. Each owner can sell, transfer, or mortgage their share without the other’s permission. When one owner dies, that share passes under their will or state inheritance law rather than automatically to the surviving co-owner.
Because a share can move to an outsider, unmarried co-buyers often add a right of first refusal to their co-ownership agreement: the selling owner must offer the share to the other owner at fair market value before listing it publicly.
Joint Tenancy with Right of Survivorship
Joint tenancy requires equal shares acquired at the same time through the same deed. Its defining feature is survivorship: when one owner dies, the interest passes directly to the surviving owner without probate. The survivor typically files a death certificate and an affidavit with the county recorder to complete the transfer.
Either owner can sever a joint tenancy without the other’s consent. If one owner transfers their share to a third party, the joint tenancy converts to a tenancy in common and survivorship disappears.1LII / Legal Information Institute. Concurrent Estate A co-owner can also file a partition action to force a sale or division.
Tenancy by the Entirety
Tenancy by the entirety is available only to married couples and is recognized in a majority of states. It works like joint tenancy, with equal shares and survivorship, but adds a protection unmarried buyers cannot get: neither spouse can sell, transfer, or mortgage their share without the other’s consent.2LII / Legal Information Institute. Tenancy by the Entirety In most states that recognize it, a creditor with a judgment against only one spouse generally cannot force a sale of property held this way.
Why You Need a Co-Ownership Agreement
The deed says who owns the property. It does not say who pays the water bill, who gets the house if the relationship ends, or how the buyout price is set. A written co-ownership agreement, sometimes called a cotenancy agreement, fills that gap. It is not legally required, but without one, disagreements often end up in court.
A useful agreement addresses:
- How mortgage payments, property taxes, insurance, utilities, and maintenance are divided.
- Who pays for improvements and repairs, and whether the paying owner gets extra equity credit.
- A buyout process, including how the property will be valued.
- Events that trigger a sale, such as a breakup, relocation, or an owner’s inability to pay, and how proceeds are divided.
- Whether disputes go to mediation or arbitration before either party files suit.
- What happens to a deceased owner’s share, especially under a tenancy in common where the share may pass to someone other than the surviving co-owner.
Putting these terms in writing before closing protects both parties and can prevent a costly partition action later.
Qualifying for the Mortgage Together
A lender evaluates each applicant on a joint mortgage individually, then combines the results. A weak profile on one side can raise the rate, cap the loan amount, or sink the application.
Credit Scores
Each applicant’s credit is pulled from all three major bureaus. The lender finds each borrower’s median score, then uses the lowest median among the borrowers to price the loan.3Fannie Mae. Determining the Credit Score for a Mortgage Loan If your scores are 710, 730, and 745 (median 730) and your co-buyer’s are 660, 680, and 695 (median 680), the loan is priced off 680. A co-buyer with a lower score means a higher rate for both of you.
Debt-to-Income Ratio
The lender combines both applicants’ monthly debt payments and divides by their combined gross monthly income. Fannie Mae’s cap is 36% for manually underwritten loans, stretching to 45% for borrowers with higher credit scores and reserves. Loans run through Fannie Mae’s automated underwriting can be approved with a DTI as high as 50%.4Fannie Mae. Debt-to-Income Ratios
Student loans count against DTI even when they are in deferment or on an income-driven plan. For FHA loans, if the credit report shows a $0 monthly payment, the lender must count 0.5% of the outstanding balance as the monthly obligation.5Department of Housing and Urban Development. Mortgagee Letter 2021-13 – Student Loan Payment Calculation of Monthly Obligation On a $40,000 balance, that adds $200 to monthly debt. The only way to leave a student loan out of DTI is to document that the balance has been forgiven, canceled, or paid in full.
Employment and Assets
Both applicants need to show at least two years of employment history. Expect to provide W-2s for the past two years and recent pay stubs. Self-employed applicants provide two years of full federal tax returns with all schedules. A gap of a month or more in the past two years triggers a written explanation and possibly supporting documents. Recent bank statements verify that down payment funds have been sitting long enough not to be borrowed; large unexplained deposits will prompt more questions.
Non-Occupant Co-Borrowers
If one co-buyer will not live in the home, such as a parent helping an adult child qualify, Fannie Mae treats that person as a non-occupant co-borrower. For manually underwritten loans that use the non-occupant’s income, the maximum loan-to-value ratio drops to 90%, and the occupying borrower generally must contribute at least 5% of the down payment from their own funds.6Fannie Mae. Guarantors, Co-Signers, or Non-Occupant Borrowers on the Subject Transaction Loans processed through automated underwriting allow up to 95% LTV.
Financial Risks When Your Names Are Tied Together
Signing a mortgage with another person links your finances in ways that outlast the relationship, the job, or the plan you started with.
Joint and Several Liability
When two people sign a mortgage, both are typically responsible for the entire balance, not just half. If your co-buyer stops paying, the lender can pursue you for the full amount.7LII / Legal Information Institute. Joint and Several Liability A missed payment appears on both credit reports, and a foreclosure damages both credit histories. A co-ownership agreement can govern what the two of you owe each other, but it cannot change what you both owe the lender.
Judgment Liens
If your co-owner loses a lawsuit, the resulting judgment lien can attach to their interest in the property. In most states the lien reaches only that owner’s share, but it still clouds title and complicates a future sale or refinance. Married couples holding property as tenants by the entirety generally have stronger protection against one spouse’s individual creditors, which is part of why married co-buyers often choose that structure.
Bankruptcy of a Co-Owner
If a co-buyer files Chapter 7, the trustee can potentially sell the debtor’s interest in the home. The trustee must pay the non-filing co-owner the value of their share from the proceeds, but the non-filing owner can still be pulled into an involuntary sale.
Taxes for Unmarried Co-Owners
Unmarried co-owners file separate returns, and shared ownership changes how a few common tax benefits work.
Mortgage Interest Deduction
The lender issues one Form 1098, usually under whichever borrower’s Social Security number is listed first. The owner who receives the 1098 deducts their share of interest on Schedule A, line 8a. The other owner deducts their share on line 8b and attaches a statement showing how much each person paid and the name and address of the person who received the 1098.8Internal Revenue Service. Publication 936 – Home Mortgage Interest Deduction Both owners must itemize to claim any of it.
Capital Gains at Sale
A homeowner who has used the property as a primary residence for at least two of the past five years can exclude up to $250,000 of capital gain from income on sale.9Internal Revenue Service. Topic No. 701 – Sale of Your Home Married couples filing jointly get $500,000. Unmarried co-owners each get the $250,000 limit applied to their share of the gain. If only one co-owner actually lived in the home as a primary residence, only that person qualifies; the other owner’s share of the gain is fully taxable.
Gift Tax on Unequal Contributions
If two co-owners hold equal title but one contributed significantly more to the down payment, the IRS may treat the excess as a gift. For 2026, the annual gift tax exclusion is $19,000 per recipient.10Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Anything above that requires the contributor to file a gift tax return (Form 709), though no tax is owed until lifetime gifts exceed the lifetime exemption. Holding title as tenants in common with shares that match actual contributions avoids the issue.
Getting Out of Co-Ownership
Not every co-ownership arrangement lasts. Planning the exit is as important as planning the purchase.
Buyout
The simplest exit is for one owner to buy the other’s share. That usually means an independent appraisal, an agreed price, and a refinance into the buying owner’s name alone. The refinance matters: removing a name from the deed does not remove that person from the mortgage. The remaining owner must qualify for the full loan on their own income and credit.
Sale
If neither owner can afford a buyout, selling the home and splitting the proceeds is the cleanest option. A co-ownership agreement should spell out how proceeds are divided when one owner contributed more to the down payment, mortgage payments, or improvements.
Partition Action
When co-owners cannot agree on whether to sell, either owner can file a partition action. The court can physically divide the property (partition in kind) or, more commonly for a house, order it sold and the proceeds split (partition by sale). The court appoints a referee to run the sale and distribute proceeds by each owner’s share. Partition is expensive and slow, and legal fees, court costs, and referee fees eat into the net. A co-ownership agreement with a clear buyout clause and dispute resolution process is what keeps you out of it.