Buying your first home as a couple should be a very exciting and positive time. If you think about it, purchasing a home together is almost a larger commitment than getting married. If you split up as homeowners, you have a large asset on your hands to split up, a mortgage to contend to and a loan to transfer. If you get divorced as a couple who just lives in a rented space, you can proceed with the divorce with almost no contact if you want, and just stay with a friend. So, congratulations on making this big commitment to each other! It says a lot about your bond! But there are also some things you should know before beginning the process so that it doesn’t totally derail your bond, and just totally take you by surprise. Here are things you and boo should know if you want to buy a home together.
Know your finances before even looking
Before even driving through neighborhoods looking for for-sale signs, or opening one newspaper that lists properties on the market, know what your price range is. If you don’t do this, you will fall madly in love with a house you cannot afford.
Consider a co-signor
Don’t be stubborn and proud about doing this on your own. Asking a wealthier family member who has better credit than you do co-sign on your loan could get you a much higher loan.
But be very selective about your co-signor
Speaking of co-signors, make sure you select one with whom you have a rock-solid relationship. If there is any chance your relationship with this person could collapse then this is not the co-signor for you. If they pull out later, you’ll be stuck with payments you cannot afford.
Remember you don’t need to use your whole loan on the house
If you qualify for a loan that’s much bigger than the price of a house you love, great! Don’t start flipping through ads for pricier houses, just because you can. Remember that you can use the rest of your loan on other expenses on the home that will inevitably come up.
You need to like your neighborhood
The most incredible, breath-taking house in the world cannot make up for a neighborhood that you dread driving home to, hate walking through, and to which you would feel guilty inviting your friends.
You need to have enough space
On the reverse side of the neighborhood argument, a neighborhood that’s smack dab in the middle of everything you love, and near all of your best friends, will not make up for a teeny, tiny shoebox of a place. Striking a balance between neighborhood and square footage is crucial.
Don’t forget these hidden fees
When considering what you can spend on a home, don’t forget about home owner’s association (HOA) fees (which can be three to five hundred dollars a month), property taxes, homeowners insurance, water…any and all repairs. You don’t have a landlord who is responsible for fixing your broken thermostat anymore. That’s all on you.
Interview residents about the HOA
Talk to the residents about their satisfaction with the homeowners association. Do they do their job? Do they hire legitimate contractors to work on and beautify things? Do they raise their fees every few years?
You’ll be more precious about who comes over
Once you own a home, you’ll be surprised at how precious you are about who comes over. At your old, rented place, you knew that your landlord could eat some of the cost of damages. Now, the only person paying for anything if your reckless cousin visits will be you.
You should put down as much as you can
If you can afford to put down a large payment without it affecting your quality of life, do so. Property is a good place for money to sit. Your money is in all likelihood more secure in your home than in, say, the stock market. So don’t negotiate a small down payment just for the hell of it.
Look into resale history
In addition to knowing the current value of your home and neighborhood, plus projected values, you should know a bit about the area’s history. If it has remarkably low resale value, that’s something you should know and investigate.
Consider how long you’ll want to stay there
Once you know the resale history of homes in your area, ask yourself if that fits into your plan. If your home would only increase X amount in ten years, but you need it to increase Y amount because in ten years you and your spouse hoped to upgrade to neighborhood Z, that could be a problem.
Consider price-affecting factors
If the price of a neighborhood is high because it’s near a school or major train station, but you don’t have children, don’t plan on having children, and aren’t commuters, maybe that isn’t the best neighborhood for you.
If you do want kids, consider that, too
Would you feel safe having your child walk home from school in this neighborhood? Would you be okay with how close your children were to bars, nightclubs, and other not-child-friendly venues?
Meet your potential neighbors
Neighbors can make a big difference in your home-owning experience. If you can’t decide between two places that you love equally, meet the neighbors. The information you gain through this may be the deciding factor.
Save money for DIY projects
Make part of your budget a DIY project budget. You’ll end up spending money on A) learning to fix things around the house (home improvement classes are valuable investments!) and B) Buying the tools and materials to fix those things.
Don’t be afraid to inspect things yourself
It isn’t rude, when you’re interested in a house, to ask if you can bring in your own contractor to inspect things. If anything looks off to you, a non-biased contractor can give you the scoop.
And use what you know to lower the price
Keep in mind that if you find something problematic in the home, you can use that as a bargaining tool. Paying a contractor a few hundred dollars to inspect the house could shave thousands off the price.
Consider spending more now so you can spend less later
If the shiny, brand new house costs $20,000 more than the very cute but older house, but the cute but older house has a few large items you know will need to be replaced in five years (like the roof and flooring in the basement) it may be worth it to buy the shiny, new house.
Remember, homeownership is about more than money
Just because you can buy a home doesn’t mean that you should. If doing so would put you in the type of financial bind that would cause you to have to take on an extra, taxing job or forego activities that you love, then maybe this isn’t the right time. Ask yourself what home ownership means to you, as a couple, and if it will overall increase or decrease your happiness.