The Simple Tip for Buying a Home With Your Partner
You may love your significant other to the ends of the Earth and back, but there’s no doubt that tension will arise at some point in your relationship. Usually this tension is triggered by major life decisions or intensely stressful situations (and no, I’m not talking about weekend trips to IKEA).
Buying a home is one of the biggest decisions a couple can make, and recent research from LendingHome found that a significant percentage of couples disagree when going through the process. Their top source of disagreement? How much debt they are willing to take on. Luckily, a healthy dose of preparation and communication can help smooth the path to homeownership.
Buying a home? Yeesh, we're officially adults now
Exploring the idea of buying your first home as a couple? Welcome to adulting. This is one of the biggest steps you can take together to cement your bond and build your future life, so it’s important to approach it in the right way. Even with all of our modern communication tools and handy apps, securing a home loan and choosing a house isn’t as easy as an online pizza delivery or booking a mini vacation. It’s actually going to take weeks and months of serious planning, preparation, diligence and hard work to move through the entire process. But in the end, you’ll be rewarded with a beautiful shared space to lay your heads, and the satisfaction that you successfully reached a monumental life milestone together.
As you begin to have the homebuying conversations, be prepared for arguments. It’s only natural to (lovingly) bicker about important decisions along the way. How much should we spend? What percentage should we put down in cash? Where will we place the flat screen? Smooth the path by coming to the conversation table with an open mind and heart, and put your listening ears on.
Homebuying seems overwhelming. Where do we even begin?
First of all, calm down. This doesn’t have to be a headache-a-minute. No need to bite each other’s heads off or get ten steps ahead of yourselves. All you need to do is think about first things first. You can begin by playing around with online mortgage calculators to get an idea of how much your monthly payments may be with different loan amounts, down payments, and purchase prices. Write up a monthly budget and see how those new mortgage payments fit in with your current financial lifestyle.
Once you’ve tested the waters, it’s time to take things a step further. Namely, you need to get yourself a pre-approval letter. This is an official document that will show home sellers that you’re a serious potential buyer. It will include an overview of the loan you’re pre-qualified for, including the length of the term, the rate, and the total amount. Your chosen financial/lending institution will provide it, and then you’ll have 60-90 days until it expires.
This pre-approval letter gives you a great opening to really finalize how much you really feel comfortable spending. You’ll see a real estimate of how much your lender thinks you can afford—then it’s up to you and your significant other to decide if these payments work for you and how much you actually want to spend on a home.
We've got a golden ticket! Now what?
Armed with your pre-approval letter, you’re going to feel like you’ve got a golden ticket to homeowning paradise. You’ll be well on your way to choosing your dream home, and the sellers you meet will take your purchasing power seriously. What’s more, the letter will serve as a jumping off point for more conversations with your partner.
You’ll both be clear on the maximum you have to spend, the length of time you’ll be paying down your loan, and the types of homes you’re in the market for. By narrowing the playing field and setting realistic expectations, you’ll both be better positioned to take the whole homebuying process seriously. You’ll also avoid further arguments about ridiculous hypothetical situations and highly unlikely, remote possibilities. Instead, you’ll be focused on what’s right in front of you, and prepared to take the next step in your journey: choosing a home and making an offer.
In your life together, you’ll encounter many different issues and challenges, and together you’ll find a way to move through them. Homebuying is no different. With a few precautionary steps and some careful preparation, this might even be fun.
Learn more about buying a home with your significant other and download our free guide at loans.lendinghome.com/buying-together/.
Disclaimer: The above is provided for informational purposes only and should not be considered tax, savings, financial, or legal advice. Please consult your tax advisor. All calculations and information shown here are for illustrative purposes only. All third parties listed above are for demonstration purposes only and are not affiliated with LendingHome. All views and opinions expressed in this post belong to the individuals referenced. NMLS ID: 1125207 Terms, Privacy & Disclosures. Copyright LendingHome Corporation 2019.