Owning Multiple Homes
Decide which home to keep and what to do with the other when combining homes
One of the exciting challenges for newlyweds is setting up their first home together. But what if it isn’t your first house? When combining homes, how do you decide what to do about that second place and responsibly merge your other assets?
Decide if you plan to keep one of your homes or if you plan to sell both and move into something bigger. Once you’ve discussed this, place one or both homes on the market as soon as possible so you don’t end up owning multiple homes for too long. If one or both sell quickly, don’t worry; you can always rent an apartment until you find the home you both want to settle down in. It may be better to pay a few months rent rather than be stuck with your current home as you try to buy another or combine households with your spouse.
Managing multiple mortgages and the possibility of renting
Merging multiple mortgages can be tricky, especially if you can’t sell the other home right away and pay off that mortgage. If the house has been on the market for a year or more, consider the option of renting your house for a short period of time. While you may not intend to be a landlord for the long-term, the extra income could help you pay off some of that second mortgage, and it would replace some of the costs of keeping an empty home on the market. Weigh the costs of a few more months on the market and the upkeep of the home against the income of renters. And, be sure you get good renters who will maintain the appearance of the home and pay their rent on time.
It’s generally a good idea to engage the services of a real estate agent or other qualified professional to help you manage this rental. This person works with the market every day and has the requisite contacts to find an interested and qualified pool of renters. He or she will also be able to give you an estimate of the optimal price the property should command on the market. You might already have a real estate agent from trying to sell the home. Talk to him or her first about rental advice and the pros and cons of renting vs. leaving the home on the market.
Combining households and assets when you’re married
Whether you decide to move into a home one of you already owns, or purchase a new home for the two of you, you may have several options when it comes to sharing property ownership. Under the laws of most states, spouses generally share property under one of two forms of co-ownership:
- Joint tenancy: A form of joint ownership under which the property is owned equally by both partners. This is the most common form of joint home ownership, and often chosen by married couples when combining their households.
- Tenancy in common: A form of co-ownership where each spouse owns a percentage of the home. The percentages need not be equal.
Consider setting up a joint tenancy in what was once your individual residence or adding your spouse to your existing mortgage. This requires refinancing your existing loan into a new one in both names. Before you make this step in combining homes and consolidating assets and debt, be sure to consider both your credit scores and how a joint mortgage might affect your individual situation.
Work with Citizens Bank to manage the financial aspects of combining households
Home loan advisors at Citizens Bank can help you understand a mortgage refinance better to decide if it’s right for you and your spouse. Visit Citizens Bank to learn more about first mortgage options, multiple mortgages and to take advantage of our home ownership kit. Find more information on home loans online, or speak to one of our advisors at 1-888-514-2300.