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Sometimes the way to the American Dream of home ownership is through unconventional circumstances. For example, you may enter into a partnership on a house purchase without the legal rights of marriage. What considerations do you have to watch out for in such an arrangement? How can you assure your rights of ownership in case of problematic situations like death or break-up? Here is an examination of the home partnership quandary…

Unmarried Obstacle

Couples and partners who are unmarried (either by choice or law) face many tax complications when applying for joint home ownership. In the event of break-up, for example, married couples who are divorcing can transfer ownership of a house without tax penalties. But unmarried partners, if a split occurs, might face excise or gift taxes when transferring ownership.

Cohabitation Agreements

Besides communicating succinctly on shared financial accounts and funds, unmarried couples can draw up a “Cohabitation Agreement,” which is essentially a legal documentation of all assets (including the house) and instructions for the maintenance of same. Establishing and authorizing a durable power of attorney is another option, and can allow a partner to access accounts and pay off bills if his or her partner is incapacitated.

A Will, A Way

Drawing up a will offers the best protection in the partnership scenario for home owners. Distinct guidelines for transfer of the home in case of death of one or the other can put a calm against the potential for any other claims among heirs.

Of course, this is a cursory glance into the aspects of home partnerships. For more information, consult a real estate professional, attorney or tax consultant.

The mantra of real estate — location, location, location — also can apply to the equity in your home. If you live in an expensive market (even in this economic downturn), such as parts of the Northeast or California, now might be the time to make that move you have always been thinking about - to a region of the country where you can get more house bang for your buck. Not only do you get more but you can also lower monthly mortgage installments and pay off debt. Here are the considerations for cashing in on home equity.

American Dream Benefit

There are several ways to manage extra home equity. You can take out a home equity loan to take care of extra expenses, but this has become very difficult for people with less than tip top credit. Or you can cash out and move to an area of the country where housing and land are cheaper.

Housing Costs and Lifestyle

The house is the biggest expense for most families in the U.S. In some parts of the country, a large percentage of monthly budgets go for the mortgage. If you struggle with monthly upkeep on this payment, and you live in a more lucrative housing market, you would be a good candidate for cash in and move on. Also if you are working out of your home, and location is not a concern for commutes or family, a cash-in and move on may yield a dream home.

With the economy is a funk, it may be the right time to assess your lifestyle, budget and home costs to see if your home equity can lead to a more affordable life.