Buying a home can evoke feelings of excitement and pride. But when you’re buying a home as a couple, the excitement can quickly turn into stress and anxiety, especially when conflicting opinions are left unchecked. If you’re shopping for a home with your partner, there’s a lot to think about. Fortunately, with a little planning and a lot of communicating, you can find a home that fits your budget, meets both of your needs and strengthens your relationship.
These tips and strategies can help guide your decision and simplify the homebuying process.
Communicate Clearly, Honestly and Respectfully
Purchasing a home is one decision you want to make sure you feel good about, which means you might have to get through some difficult conversations along the way.
Before you start your search, make sure you’re ready to communicate clearly, honestly and respectfully. Recognize that your opinions may differ but resolve to stay calm and listen to your partner’s perspective. Settle on your ideal location, then discuss your priorities and figure out what you need, what you want and where you’re willing to compromise.
Talk About Your Financial Situation
Talking about your financial situation isn’t exactly reminiscent of romance, which is why 46% of Americans say they don’t speak with their partner about money. An open and honest conversation about your financial situations — including sharing your views about money, credit scores, debt obligations, savings and income — can save time and make shopping for a home and a mortgage that much easier. If you have a financial advisor, consider including them in some of your conversations so they can offer an impartial perspective and help you align your home purchase with your other financial goals.
Determine Your Budget
With your list of priorities in hand, the next step is to figure out how much home you can afford, and how much you’re willing to spend on your monthly mortgage. If you’re buying a home as a couple, your lender will look at both of your credit scores, along with your combined debt-to-income ratio. So, while buying a home as a couple can increase your buying power, if one person has a lower credit score or carries a lot of debt, it could negatively affect both of you.
For many couples, the amount of home you can afford may actually be higher than the amount you want to spend. For example, if you’re approved for a $500,000 mortgage, you might decide the monthly payments are more than what you’re both comfortable paying. Or maybe you can comfortably afford the monthly payments but you don’t have enough for the down payment. Whatever the case, make sure you and your partner both feel comfortable with the purchase price, down payment (including closing costs) and monthly expenses. Don’t forget to include taxes, homeowners insurance and mortgage insurance (if applicable) when you run your numbers. You’ll also want to set aside an emergency fund for unexpected repairs and other expenses.
See a home you like? Use our mortgage calculator[JP1] to estimate your monthly payment.
Choose How You’ll Own the Home
Owning a home is a bit different than owning other types of assets, so you’ll need to decide how you and your partner will own the property. Each ownership type features certain benefits and drawbacks that determine your rights to the property, what you can do with your share of it and what happens in the event of an owner’s passing. Most couples will choose between joint tenancy, tenancy by the entirety and tenancy in common. To learn more about real-estate ownership types, talk to your real estate agent or an attorney.
Make a Plan to Divide the Expenses
There are many ways to divide the expenses associated with joint home ownership. Since each couple’s financial situation is different, you’ll need to decide what works best for you. Some couples prefer a simple approach, splitting the expenses 50/50. If there’s a significant difference in your incomes, you might prefer to divide expenses proportionally based on the amount of money each of you earns. How you plan to divide expenses should be part of your early conversations
Embrace Change if You Need To
If your priorities or budget change, that’s okay! If you need to take a break from house hunting to work on your credit and save more money for a down payment, that’s okay. Shopping for a home may not go exactly according to plan, but remember that you’re in this together and that when you do find the right home, you and your partner can use it to build a lifetime of memories.
Tap Into Expertise – A Trusted Mortgage Expert
When you’re buying a home as a couple, the importance of working closely with your third partner — a trusted mortgage professional — can’t be overstated. The right mortgage pro can streamline the application process and empower you to make smart, confident decisions based on your budget and needs. Our expert loan officers will also support you through every stage of your search, creating a seamless experience to help you and your partner find and finance your dream home.
Ready to learn more? Connect with a loan officer today
