This a question that many couples planning a future together mull over. Is it ok to buy a home before making everything official or is it better to wait until the marriage is official? Well, there is no right or wrong answer to this question. Buying a home is convenient whether the two of you are married or not. The process can be draining if you have work commitments and a wedding to plan but owning a home is quite fulfilling and can add to that bond the two of you share. Also, once you own a home you are building equity!
There are home buying steps which should be adhered to when deciding to purchase a home! This will help to anticipate what you will experience during the home buying process/
What are Home Buying Steps?
Before you begin the home search process, sit down and have an agreement on the buying points before hiring a real estate agent.
This may seem obvious, but it is not always the case. There have been instances where one person agrees to the desires of the other party against their better judgment. These issues often come up in the future and they usually never end well. Some of the things that you need to agree on include:
- The type of home that you plan to purchase, whether it be a single family, condo or a townhouse.
- The neighborhood that you have decided to live in. There are tips for selecting the best neighborhood including ensuring you check out the school district!
- What can you afford? Be sure not to make home buying mistakes including not meeting with a lender before starting your home shopping!
When choosing the type of home, go over the details and discuss all the features that you both want in a home. The two of you may differ on certain features, but it is always wise to reach a compromise before progressing to the next stage.
The same applies to the neighborhoods. Have a list of the top areas you want to live and make your Home Buying plans with those neighborhoods in mind. When it comes to picking the price range, you can have a discussion with your mortgage lender and choose home a home repayment plan that you can afford comfortably!
Financial Contributions
Owning a home comes with overhead starting with the down payment and closing costs. There are also recurring costs such as insurance, utility bills, and maintenance costs just to mention but a few. It is important to sum all the costs and decide on the ratio both of you are going to contribute.
How Will You Take Title?
There are different on how you plan to take the title of your property. This is an important discussion to have prior to embarking on the home buying process. There are a few different ways to take the title and they include Tenants in Common, Joint Tenancy or Joint Tenancy with Right of Survivorship. You may consult a tax advisor or a Real Estate Attorney for clarification on how to take the title of the home.
What Type of Mortgage are you Considering?
This is most likely the number one step! Your Mortgage lender will be able to provide guidance on what you can afford, and this will lead you to shop for your home within your price point.
Your Realtor will most likely have a few referrals for you for a lender. The lender will discuss the different type of loans and interest rates. Also, you will understand when a lender locks the rate to ensure you obtain the most desirable interest rate. Some of the loan packages may include the following:
- Fixed rate mortgage
- Adjustable-rate mortgage
- FHA Loans
- VA Loans
If you are obtaining either an FHA or VA loan, the complexes that you may be considering will need to be approved, so this is another factor. Condo complexes may be something that you are considering, and condos do offer many benefits to buyers.. Many condo complexes are not FHA approved and therefore you cannot obtain that type of mortgage if you getting that type of loan!
Should We Get a Pre-Nuptial Agreement?
No one wants to bring up the elephant in the room, however, this should be discussed. Many couples will decide to have a pre-nuptial agreement prior to marriage. If the couple is purchasing the home together, then the home would be community property if that is what was decided upon. Often times feelings get hurt with prenups, utilizing one may be the best financial decision a couple can make. Each person may have their own assets prior to marriage they want to protect in the event of an unfortunate split in the future!
Final Thoughts
Ultimately it will be up to you whether or not you purchase a home, you might decide it is in all parties best financial to rent versus buy! There are definite financial implications that need to be closely evaluated prior to purchasing a home.
Other Valuable Resources
Buying a House Before Marriage is an excellent article written by Bill Gassett who discusses the steps to purchase a home prior to getting married.
John Cunningham has written an excellent article about What are Closing Costs which is another important factor to understand and have the funds to pay for them.
If you are a first time home buyer, then this article First Time Home Buyer Programs is an excellent resource about different loan scenarios shared by Luke Skar.
Once you get into escrow, you will want to be very careful not to Blow Up Your Financing! Michelle Gibson talks about what you should not do when you are getting financing!
About the Author
The above article "Should We Buy a Home Before Marriage or Wait?" was written by Sharon Paxson of Newport Beach Real Estate. With combined experience since 2005, we represent buyers, sellers, and landlords with their real estate transactions. If you are considering selling your home, we welcome the opportunity to work with you and list your home with a top Newport Beach CA Realtor.
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