Buying a home is a particularly stressful event, especially for couples. Disagreements can damage your relationship, however, planning and open communication can prevent problems.
In fact, there’s every reason to be optimistic. A 2013 homebuying study from Coldwell Banker Real Estate showed that 80 percent of married Americans who bought a home together believed that it strengthened their marriages more than any other purchase. Here are the steps you should take before committing to a mortgage with your partner.
Change Your Perspective
The excitement of open house events and home tours should not crowd out the significance of the investment you are making. Investopedia recommends you look at your house as a life goal rather than as a nice place to live. Many mortgages offer 30-year terms. Are you prepared to commit to three decades of ownership, maintenance and change?
Once you understand this commitment, it’s time to talk with your spouse. The first discussion should cover the most important aspect of buying a home: the budget.
Talking About The Budget
Open communication about finances can help support your relationship through this process. There are several topics you should cover:
● Assess your combined income. What type of mortgage payment can you comfortably afford? How reliable are your income sources? How will you pay the mortgage if you lose your job?
● How much can you afford for a deposit? If you don’t have enough to cover your desired price range, you may need to hold off to build up your budget.
● What are your credit scores? These will indicate how much of a mortgage you can afford – or if you can afford one at all. They need to be fairly high to get quality loan approval.
● Fixer-upper options. Are you buying a cheaper home that you’ll renovate? Plan for the timing of the renovations and how much you’ll invest.
● Additional budget. Don’t forget to factor in the extras: property taxes, closing costs, moving costs, homeowner association fees, etc. These can inflate your home buying costs more than you might expect.
Needs and Wants In Your New Home
Once you’ve settled on a doable budget, the next step is to consider what you want for your new home. Both of you should sit down with a list of “must haves” and “wants.”
The first topic to discuss is location. You should keep in mind objectives like commute time to work and activities, area housing prices, local property taxes and quality of school district if you have or are planning on having children.
Make sure your “must haves” are really a requirement. For example, a backyard could be a must-have but a swimming pool should be optional. Remember that unimportant but pricey upgrades can dramatically inflate house prices.
For Unmarried Couples
If you are an unmarried couple purchasing a home, you need to take extra precautions even if you are planning to marry. Time Magazine recommends putting your agreement in writing beyond your home buying contracts. These agreements can cover an issue like what to do if one party can no longer cover their costs.
You must also make these decisions:
● Who will be on the title and the loan? Credit scores might impact this decision.
● What will you do if you split up? It’s an unpleasant discussion but will save you grief in the event this happens.
● What settlement agent will you use? An independent settlement agent is a better choice than one that you or your partner already retains.
Careful planning and open discussion will protect your relationship during this process. This article from RIS Media has 10 more ways to that couples can protect their relationship when buying a home.
Photo credit by Unsplash
Written by: Natalie Jones.
