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HuntsvilleWeddings.com
Should Newlyweds Buy A House?
So you've returned those well-meant-but-weird gifts, sent the thank-you notes and settled into your newly married life.
If you're like many freshly minted couples, now you're thinking about buying a home of your own, with plenty of storage space for the wedding gifts you actually kept.
But how do you know if you can afford to be homeowners? Is it wise to buy a home before the ink dries on your marriage certificate? What are some of the common mistakes newlyweds make when buying a home?
While having a home of your own is certainly rewarding many young couples are swept up in the romance of their new life and forget that buying a home is a huge financial commitment.
A few things you may want to consider include paying down student loan debt and cleaning up credit card debt. Also,
be careful not to buy more home than you can realistically afford. I prefer my clients are happy in their new homes and not lose them in two or three years because they’re not really prepared to be homeowners.
Clean up your financial house BEFORE you take on a mortgage by eliminating as many other financial commitments as you can. Pay off leftover wedding or honeymoon bills as well as credit card debt. Additionally, pay down or even pay off car loans. Take a close look at your student loan debt and any old debts either of you brought into the marriage. A couple's total monthly debt -- including their new house payment -- should not be more than 35% of their gross income.
You should also pull copies of both of your credit reports to see where you stand. Your credit ratings will make a big difference in your mortgage interest rate and, therefore, your monthly house payment.
Finally, get life and disability insurance for each of you. Life insurance, particularly, is cheap these days. If your employer doesn't offer it, or doesn't offer much, consider individual policies. If something tragic should happen to one of you, the insurance can help pay down -- or completely pay for -- your new home.
Resist the urge to splurge. If you're looking forward to buying a home within a year, don't take out loans for a new now-we're-a-couple car,
an expensive suite of furniture or trendy weekend toys such as motorcycles.
Aside from the fact that you'll need extra money for your home down payment, mortgage lenders don't like seeing new debt on your credit report.
Manage your moves. If one of you is moving to a new job or changing careers, sit tight on the house purchase for three to six months. A
stable employment history is important to mortgage lenders.
If you move to a new city after you get married, consider renting for a year before you buy a house. It can take a while of actually living in a new place before you know which neighborhoods are the ideal ones for you.
Save, save, save! Even if you need to put contributions to your retirement plan on hold, this is the time to sock away cash. I recommend couples have at least three months of expenses stashed in an emergency fund -- in savings or a money-market account -- in case one partner loses a job, gets ill, becomes pregnant, etc. You don't want to lose your house when an unexpected financial crisis hits.
It's also smart to save up a hefty down payment. The more you pay upfront on your house, the smaller your fixed monthly payments will be. You also may be able to eliminate the cost of private mortgage insurance by putting down at least 20% of the house's cost. I hope this helps, please contact me personally for recent updates and ideas!
So you've returned those well-meant-but-weird gifts, sent the thank-you notes and settled into your newly married life.
If you're like many freshly minted couples, now you're thinking about buying a home of your own, with plenty of storage space for the wedding gifts you actually kept.
But how do you know if you can afford to be homeowners? Is it wise to buy a home before the ink dries on your marriage certificate? What are some of the common mistakes newlyweds make when buying a home?
While having a home of your own is certainly rewarding many young couples are swept up in the romance of their new life and forget that buying a home is a huge financial commitment.
A few things you may want to consider include paying down student loan debt and cleaning up credit card debt. Also,
be careful not to buy more home than you can realistically afford. I prefer my clients are happy in their new homes and not lose them in two or three years because they’re not really prepared to be homeowners.
Clean up your financial house BEFORE you take on a mortgage by eliminating as many other financial commitments as you can. Pay off leftover wedding or honeymoon bills as well as credit card debt. Additionally, pay down or even pay off car loans. Take a close look at your student loan debt and any old debts either of you brought into the marriage. A couple's total monthly debt -- including their new house payment -- should not be more than 35% of their gross income.
You should also pull copies of both of your credit reports to see where you stand. Your credit ratings will make a big difference in your mortgage interest rate and, therefore, your monthly house payment.
Finally, get life and disability insurance for each of you. Life insurance, particularly, is cheap these days. If your employer doesn't offer it, or doesn't offer much, consider individual policies. If something tragic should happen to one of you, the insurance can help pay down -- or completely pay for -- your new home.
Resist the urge to splurge. If you're looking forward to buying a home within a year, don't take out loans for a new now-we're-a-couple car,
an expensive suite of furniture or trendy weekend toys such as motorcycles.
Aside from the fact that you'll need extra money for your home down payment, mortgage lenders don't like seeing new debt on your credit report.
Manage your moves. If one of you is moving to a new job or changing careers, sit tight on the house purchase for three to six months. A
stable employment history is important to mortgage lenders.
If you move to a new city after you get married, consider renting for a year before you buy a house. It can take a while of actually living in a new place before you know which neighborhoods are the ideal ones for you.
Save, save, save! Even if you need to put contributions to your retirement plan on hold, this is the time to sock away cash. I recommend couples have at least three months of expenses stashed in an emergency fund -- in savings or a money-market account -- in case one partner loses a job, gets ill, becomes pregnant, etc. You don't want to lose your house when an unexpected financial crisis hits.
It's also smart to save up a hefty down payment. The more you pay upfront on your house, the smaller your fixed monthly payments will be. You also may be able to eliminate the cost of private mortgage insurance by putting down at least 20% of the house's cost. I hope this helps, please contact me personally for recent updates and ideas!
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