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?
Don Patrick, a certified financial planner with Integrated Financial Group in Atlanta, is a big fan of couples becoming homeowners. However, he's cautious about recommending such a big investment for pairs just starting their married lives together.
"While having a home of your own is certainly rewarding," he says, "many young couples are swept up in the romance of their new life and forget that buying a home is a huge financial commitment."
Allyson Bernard, a veteran agent with Real Estate Professionals of Danbury, Conn., agrees. She works carefully with newly married clients to ensure that they've given attention to other financial commitments in their life -- paying down student loan debt and cleaning up credit card debt for example -- and that they're not buying more house than they can comfortably afford.
"I want my clients to be happy in their new homes, not to lose their houses in two or three years because they weren't really prepared to be homeowners," she says.
Clean up your financial houseBefore you take on a mortgage, eliminate as many other financial commitments as you can. Pay off leftover wedding or honeymoon bills or credit card debt. 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.
Patrick's rule of thumb: A couple's total monthly debt -- including their new house payment -- should not be more than 45% of their gross income.
You should also pull copies of both of your credit reports to see where you stand. (Read "How to get a credit report for free.") 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 splurgeIf 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.
"You don't have a reliable record of payment for a new car, for instance, so you're in a riskier category financially," Patrick says.
Manage your movesIf 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, Patrick says.
"It can take a while of actually living in a new place before you know which neighborhoods are the ideal ones for you," he says.
Save, save, saveEven if you need to put contributions to your retirement plan on hold, this is the time to sock away cash. Patrick likes couples to 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.
Get preapproved before house-love hitsBernard won't show clients any houses until they've had a serious sit-down with a mortgage lender, even if it's not the bank or broker they eventually use.
"It's just awful to see a newly married couple get their heart set on a particular house, only to find out afterward they can't afford it or they're not creditworthy enough for a decent mortgage," she says.
"I insist that they take care of the boring financial details first," Bernard says. "Once they know they're qualified for a home loan and know how much they can afford to spend, they're free to focus on the more emotional side of the transaction -- finding the house they love."
Research mortgage dealsEven if you've had your checking account at Stable Mega Bank since your college days, you don't necessarily want to get a mortgage there. Mortgages are very competitive financial products these days, and you might not get a better deal at your current bank just because you're already a customer.
Real estate agents usually keep track of reputable mortgage brokers in your area, so be sure to ask your agent for recommendations. And ask if your agent is getting any kind of referral fee for the suggestion. In many states, such fees are illegal.
Do you still have more questions?
Call me, Jovani at 415.213.8215 if you have any more questions. I can help you find a financial advisor as well as refer you to several mortgage consultants (I don't get referral fees from my sources).
I can also sign you up for www.CleanOffer.com which helps you accurately and efficiently search for properties on the market.
Just let me know how I can help you,