So, are you someone who has married recently or are you preparing yourself for getting married? Whichever might be your situation, you should be ultimately ready to get off your financial foot. Till now whatever advice you might have heard must have been on how urgent it is for you to own a house rather than devoting your money towards rent costs. A house is always considered as the best investment keeping in mind long-term wealth building. With prices below average level, available tax credits and everyone from your parents to your grandparents urging you to act fast, you should go slowly!
Although the aforementioned reasons are all true, yet that doesn’t mean that you should purchase a home soon after returning from your honeymoon. Just as you require a trustworthy estimator for tax calculation for the entire year, similarly you will need much more than few tax credits to make home buying possible.
Do you think you’re ready financially?
Majority of the newlywed and engaged couples are aware of the fact that they need to take good care of their finances before they even dream of buying a house. This thought should be focused on determining the minimum credentials which a mortgage broker will need before approval of the loan. Real estate agents and mortgage brokers will approve a larger home loan which you should take on even though there is a subprime housing meltdown. Here are few immediate financial goals that you should take into account.
- If you have a good credit score of 750 or more than that, you can get the best rates on your mortgage loan.
- If you have at least 5-10% of the mortgage total amount applicable as the down payment to the loan, the rates might be lower.
- In an ideal situation, you should become debt free but before everything else you have to pay off all the unsecured consumer debt that you owe.
- Take out a home loan where the total payment that you have to make will not be more than 25-30% of the monthly income that you make.
Well, this advice might have seemed pretty old-fashioned and conservative but if you’re a newlywed who is planning to buy a house of your own; this should be your immediate strategy to adopt.
Are you sure about the place where you’re about to live?
While majority of the couples are more engaged in taking out time regarding their finances, there are many others who don’t actually think of the permanency which is associated with purchasing a home. The place where the home is located will be the place where you’re probably going to spend the next decade of your life. So, did you think carefully on whether or not that is the place you wish to live in? The minimum time that you will take in covering the costs will be 2 years and hence this is a vital consideration. Here are few questions to ask each other:
- Will our career paths allow us to reside in the same area?
- Will we remain comfortable with the regular commutation that will be needed to reach our respective workplaces?
- Is this area upgrading itself and are there new couples coming in?
- Are we at a reasonable distance from our in-laws’ place?
- Is this area abundant in schools so that we could send our children to proper schools?
If you allow yourself enough time, like 1 year to let your marriage mature, you will definitely get better and more interesting questions to answer. If you could event rent services like painting, maintaining your house and mowing the lawn to a professional, you could just enjoy your newly married life and focus on your nuptial life.
So, as we see, couples, especially the newlywed ones should take it easy for at least one year. Utilize this year to settle down and make your financial condition stronger. Then you have enough time left to find a nice home at an affordable price and you can set your family with a good financial life. Try your best to manage your finances.