It wasn’t long ago that buying a home seemed like a no-brainer for every married couple.
However, times have changed a bit with the housing crisis and the economic woes of the last several years.
That said, home ownership still makes sense for many couples, and it remains one of the most important financial decisions you’ll make in your marriage .
If you’re considering buying your first home, upgrading or relocating, you have a lot of items to consider. We’d suggest starting with these five questions:
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How Long Do We Plan to Live Here?
This is probably the most important question you and your spouse should ask each other.
You may run into some financial issues if you buy your dream home and then a new job or other extenuating circumstances force you to move.
You could end up paying money to sell your home for a number of reasons. The value of your home may not have appreciated enough to cover the costs that you paid to buy it and the amount it will cost you to put it on the market.
On average, it takes about three or four years to cover buying and selling costs. However, this number may vary depending on economic factors and your geographic location.
Can you afford it?
Make sure to examine your financial situation, including your credit score, and make a prudent decision about whether it’s the right time for you to buy a home.
As a general rule, you should have saved at least three to five percent of the purchase price of your home as a down payment. Remember, the bigger the down payment, the better the interest rate.
Also, do you have a stable job? Obviously, you will need a consistent paycheck to make your mortgage payments. If you move cities or divorce, you could lose big on your investment – even if you’re able to sell the house.
It’s also important to pay attention to the interest rates and the condition of the real estate market in your area.
What do you need in a home?
Before you decide to buy a home, you need to evaluate your current and future needs.
Will they change? Do you plan to have children? Will the home be suitable for a growing family? These are all important questions to ponder.
Can you handle the responsibilities?
When you’re renting, the landlord typically takes care of all the necessary maintenance. Contrarily, when you become a homeowner, you’ll be responsible for things like plumbing problems and lawn care.
Is this something you’re prepared to deal with?
How is the neighborhood?
Before considering a home, do some digging into the neighborhood to make sure it’s right for you and your family. Visit at different times of the day, talk to people in the community and research the crime statistics in the area.
If you have or plan on having young children, it’s critical that you look into the schools as well. Not only will they impact your family’s education but the long-term value of your property.
Buying a home together is an exciting experience for a married couple. Make sure you do your homework and discuss the right questions to make sure you’re prepared with all the joys (and challenges) of home ownership.
Dan Martin is a financial consultant with more than 20 years of experience in the real estate business. When he’s not giving advice about home buying, he enjoys hiking with his wife and boxer mix, Rex.
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Last November my fiancé and I were looking for a home in the Ocean Reef Club. We called a few of the realtors on site and selected Bob Ecuyer as he has actually lived in the community for nearly 40 years. His team were extremely knowledgeable about the club, events and amenities. They found us a exactly what we wanted in a home. What I liked the most was his team’s desire to help us in every way. His site is www.swensonrealty.com.
These are some good questions, but I recommend people wait until they can put 20% down. That sounds like a lot, but it demonstrates the discipline to save and it allows you to go without private mortgage insurance. Plus, and this is really crucial, the combination of your mortgage, property taxes, and homeowner’s insurance should not take up any more than 25% of monthly gross income. These are good guidelines for anyone to follow, but especially married couples. Getting this – the single largest expense in most people’s budget – right is an important key to financial freedom. Getting it wrong creates a huge amount of stress and strain on the relationship. I wrote more about this here: http://www.soundmindinvesting.com/vblog/how-much-should-i-spend-on-a-house/
Thanks, Matt. I actually agree with you that a 20% down payment will put any couple on VERY solid financial footing. While the guest poster suggested 3-5% as a bare minimum, my personal advice would be to save at least 10% with 20% being ideal.
Dustin
By the way, Dustin, congrats on the new site design. It looks awesome. I know what a ton of work it is to make these changes, so again, congrats! Keep up the great work.
Asking yourself how long you will live there is a good one. When my husband and I bought our first house, I expected we would live there about five years and then move on. But things don’t always happen in the way you expect. We ended up staying in that house 13 years. If we had known what was going to happen, we might have made some different choices, either in the house we chose, or in things we did with the house, such as decisions about carpet, painting, remodeling, etc. It’s good to keep the possibility of the unexpected in mind.