You and your significant other decide to purchase a home together. It’s a huge decision with that could affect your financial future for a variety of reasons. 
A cohabitation (or living together) agreement can help both of you avoid many of those potential pitfalls.
You may ask, “why do we need a cohabitation agreement? We’re getting along great!” But what happens if things change and the relationship ends? A cohabitation agreement can protect both of you.
When you purchase a home, you will likely be borrowing money and required to sign a promissory note with a bank or mortgage company. That promissory note will be secured by a mortgage. And the real estate will be titled in one or both of your names. If you break up, how do you get your name off of the promissory note and mortgage so that you are no longer financially responsible for the debt? And how do you receive any share of the equity in the real estate? Without a cohabitation agreement, expensive and lengthy litigation may be required. For example, if you both are named on the deed as an owner of the home, you would have to file a partition action in the court to force the sale of the real estate. That could take several months and cost thousands of dollars, and result in the real estate being sold at an auction for an amount that hopefully covers the mortgage payoff but will likely be less than its market value. And, if you are not named on the deed, you may not have any legal rights to the property or equity.
A cohabitation agreement, which is a written contract, can establish specific rights and obligations relating to property, financial support, and estate plans. If the plan is to purchase property together, the agreement can establish how ownership will be shared (for example, 50/50 or other percentages) and how the financial obligations to maintain the property will be shared (establishing who is responsible for what share of the mortgage, real estate taxes, homeowner’s insurance, etc.). And, the agreement can provide the guidelines to follow to deal with the property if the relationship ends.
Buying a home is one of the biggest financial decisions you will ever make. And if you are doing it with your significant other outside of marriage, you both can protect your interests and define your responsibilities simply through a cohabitation agreement.