Newlyweds Guide to Home Buying
Article By | Cherry Ruffino
First comes love, then comes marriage…then comes buying your first home together!
You are taking the big leap starting your new life together and that may come with making plans to get into the market to buy a home. Here are some tips to consider:
Determine if Financially it is the Right Time to Buy
Finances are never a sexy topic, but so important in building your life together figuratively and literally when looking to buy a home.
Check your Credit Scores
When it comes to financing your future home, credit scores are a very important factor. To qualify, lenders look for at least a 620 credit score. Some are able to do lower but it is always at a cost. The higher the credit score the better. Should one spouse have a credit score too low to qualify for the loan, there still could be an opportunity to qualify with just the spouse holding the higher credit score. Keep in mind though, they would have to qualify on their income only as well.
Create your Monthly Budget
Knowing what you can afford for the monthly payment is important, but even more so, what are you comfortable with.
Just because you qualify for a high payment doesn’t mean you want to spend that much. It’s time to put pen to paper, listing out all your monthly outgoing expenses versus your monthly income. Now knowing this information, decide together what you are comfortable spending monthly on your mortgage payment. Don’t forget to include a rainy day fund in your budget to set aside for any unknown expenses that can come up for you and your family through the year. Then, if you don’t use it, maybe that can be your next vacation fund!
Know what you BOTH are looking for in your Future Home
We all have ideas and opinions on what we want in our homes. You would be surprised how often priorities are different between couples. We always recommend that you sit down and create a list together on what your must-haves are in your future home. Then create a list of bonus features you would like but have some wiggle room on. It is so important to be on the same page to alleviate some stress in your home search.
Assess your Savings
Time to prepare for that down payment and other expenses that come in the process of buying a home. Surprisingly you might not need as much as you think.
Down Payment
The common misconception with buying a home is you have to put down 20% for your down payment. That is not always the case! There are several different types of financing and depending on the type of loan you use, your down payment could be as low as 3.5% of the purchase price or even 0% if you are a veteran. There are benefits to putting more money down but it is not a requirement. This is where a great local lender comes into play to give advice on types of financing so you can determine which route is best for you and your needs.
Closing Costs
If you haven’t gone through the buying process before, this may be a term you are unfamiliar with. Closing costs are essentially the fees required to complete a real estate transaction and these are paid at the time of closing. These fees will include things like title processing fees, title insurance, prorated taxes, lender fees, homeowner insurance premiums, and more. Rule of thumb, in our experience, these fees run no more than about 2.5-3% of the sales price.
Other Potential Costs
There are some additional potential fees that come up on a case by case basis. These include things like home inspections, surveys, and appraisals. These are not always required. Also, depending on your lenders requirements, they could be paid at the time of service or paid at closing as part of your closing costs.
Find your Trusted Real Estate Agent
Now that you have all the hard parts out of the way, it is time to start the fun part. Starting the search for your future home, including finding a trusted local realtor to help guide you through the home buying process! There is a lot to buying a home from contacts, deadlines, negotiations, and more. That is why it is so important to have an experienced professional to help guide you over all the hurdles you will face.
Wow, that was a lot of information! We know it can be overwhelming but starting with these steps will put you on the right track to becoming homeowners. Now that you have found love, let’s find a home you love!
Cherry Ruffino is not just a name, but a trusted brand built on her integrity, diligence, and unparalleled customer service in real estate here in The Brazos Valley. Who you work with matters. Cherry Ruffino and her team are committed to making a better experience for their clients through the life transitions of buying and selling real estate.
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