Buying a new home can be an amazing experience. It provides you and your spouse a fun quest, like a scavenger hunt for the perfect nest in which to build your collective future. It can also be a source of major stress and strife if not properly handled.
While you plan your first home purchase as a married couple, consider these points to prepare for a successful purchase.
1) Find Common Ground
Before you ever open your web browser to look at homes, come to an agreement on your expectations for the new home, and be willing to compromise to find a good fit for both of you.
According to Samantha Burns, a Licensed Couples Therapist, “In searching for your dream home, it’s important to get clear on your wants versus needs, your firm deal-breakers, and ability to analyze the pros and cons. The goal is to get on the same page at the beginning of the search to minimize conflict throughout the process.”
This is critical advice, and we start here for a reason. You and your partner are a team, and a team works best when it has a common goal. If Ken wants a lake house and Barbie wants a condo in a high-rise, you’re going to end up with a Green Acres situation, where one partner’s desires are forced on the other partner, and it likely won’t be as funny as it was on TV. This is a formula for simmering resentment, which is poison to a relationship. Remember, compromise and communication are the keys to happiness and matrimonial peace.
2) Prepare Your Credit Scores
Get your credit for both parties. If one party has a bad credit score, it will affect your home loan interest rates even if the other party has ideal credit. The first step here is to know where you stand. Pull full credit reports using Annual Credit Report.com, the only site supported by the Federal Trade Commission. You can get one full report per person per year free of charge. There are several “free credit report” sites out there, but they exist to advertise to you, sell you financial services, and possibly steal your data. You can always go to http://www.ftc.gov and follow the link from there to be certain you aren’t following a bad link from a search engine.
“With Annual Credit Report.com, you will have to download each report separately and look them over, says Stephanie Adams, CEO of SOS Credit Solutions.” “It doesn’t come as a tidy report. Also, you will NOT see scores unless you buy them. The scores they do provide you are not the same scores a mortgage lender will use. So focus on the inaccuracies of the report first, then the score,” Adams advises.
Once you know your credit score, you can improve the score by paying off old forgotten bills and clearing bad marks from the report. The higher your credit scores, the better your financing will be, and the less you will pay in interest. The less you pay in interest, the lower your payment can be, and the sooner you own your home.
3) Does Marriage Mean Money?
Some people think just because they have a marriage certificate; means they have a better chance at getting a house and good mortgage payments. Applying for a mortgage as a single man, single woman, or married couple has no bearing on your ability to qualify.
In fact, marital status is a protected category under the Equal Credit Opportunity Act. The Consumer Financial Protection Bureau states, “Except as otherwise permitted or required by law, a creditor shall evaluate married and unmarried applicants by the same standards; and in evaluating joint applicants, a creditor shall not treat applicants differently based on the existence, absence, or likelihood of a marital relationship between the parties.”
The likelihood of being approved for the loan depends on income, credit, and assets—not marital status.
4) Know this is an investment – treat it like one.
It’s important to understand the property laws in your state and the disposition of ownership and title under unforeseen circumstances. No one likes to think about the death of a partner or the disillusion of a marriage, but sometimes it rains, and it’s nice to be prepared and have an umbrella.
Marriage includes full survivorship to the deed of the home, but partnerships, domestic and otherwise, may not. Have all the pertinent details noted in the title. Regardless of what state you live in, make sure you both have current wills in place that note your desired disposition of property in the event of death.
Your loan officer will likely require you to carry a home insurance policy to protect your mortgage if the worst possible scenario threatens your property. Gather quotes, meet with insurance providers, and choose an option that will protect yourself and your spouse.
As previously noted, these are uncomfortable topics, and it’s easy to ignore these details. However, proper preparation can avoid a lot of trouble and heartache down the road.
5) Enjoy your home.
The good news is homeownership ends up being a good thing for the majority of couples. According to a Zogby study from the end of 2016, more than 60% of couples said their disagreements during the home buying process didn’t matter when the process was over. More than half of couples felt the purchase of the home together made them feel “more committed” to the relationship than before. You can truly lay down the foundation for forever together in a new home. Just make sure it’s the one that is right for both of you.
Our team of experts at OVM can help guide you in the right direction. Give us a call or start your application online to begin the process. Good luck in your house hunt and future together!
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