Forget what you may have heard. Marriage and mortgages are still important priorities to millennials. What has most notably changed is the age and order in which young people are choosing to take these major steps in life. Many couples are deciding to purchase key rings before looking at engagement rings. When you and your honey are looking at houses, here are some things to consider before you say “I do” to a home.
Be it a Classic 6 townhome or a 4-bedroom, 3-bath on 2 acres, you and your partner have probably put some thought into what your dream home will be like. Before you set your hearts on a home, put away the Pinterest boards and pull out your wallets. Setting realistic expectations of what and where you can afford may change your priorities. Decide what’s more important. For instance, being close to work (and saving on gas or transport costs) may trump the “necessity” of a man cave or stainless steel appliances.
Scores and Savings
Since unmarried couples are typically seen as separate applicants for loans, you and your partner will need to have an open conversation about your credit scores and savings accounts before applying. If one of you has a less-than-ideal score, the other may consider applying individually. The issue there is that an individual income may lower loan amounts. For down payments, your combined incomes may lower monthly payments. How you divide these payments (percentage of income or availability, for example) is something you should decide on together before applying for loans.
Whether you’re joint tenants, keepers of a living trust or tenants in common, you both need to take action to protect yourselves in the event of the unimaginable. Consulting with an attorney who specializes in real estate law is a wise step before purchasing property together. This meeting is also an opportunity to discuss how the property would be distributed in the event of a death or break up and how records of payment should be kept in relation to your home.
Don’t hesitate to speak with professionals about your current finances and your plans for ownership. They’re there to help! Getting your lender and real estate attorney on the same page can help you develop a plan and is a smart way of deciding on the best option for you and your partner as your cross the threshold of home ownership.