Oh, the joys of being newly married. You’re both still on a high from your wedding and life is a bowl of cherries. You may be wondering if buying a house should be next on your list.
A home purchase will more than likely be the biggest financial outlay you will ever make as a married couple. There are many things to consider before making a final decision – whether your home will be older or newer is one consideration. If you are in the market for a new home, you would be wise to sit down with some new home builders to discuss your options.
How are your finances?
Most couples want to own their own homes. But have a look at your financial picture before you make a final decision. Looking at the bare minimum you need to purchase a home might not be the most prudent route to go. A more conservative approach will let you breathe easier financially in the long run.
Try to meet these financial goals:
- Look at your credit score. It should be in the 750 (or higher) range. This will get you the best mortgage rates.
- Have a minimum of five to 10 per cent of the purchase price for a down payment (apart from closing costs).
- Try to pay off all your unsecured debt before you go mortgage shopping. Your ideal situation is to become debt free.
- Save up about three to six months of emergency funds for household expenses “just in case.”
- Shop for a mortgage with a total payment (taking into consideration taxes and insurance) not greater than 25-30 per cent of your take-home pay every month and based on a fixed mortgage of 15 years.
There’s no hurry
Homes will be there. Realtors will be there. New home builders will be there. Using the above guidelines, prepare well to buy your first home. You will need to answer some questions before you take the home buying plunge, and a year or more seems the best course of action when it comes to answering these questions:
- Will we want to stay in the area?
- How far will we need to commute and will we be all right with that?
- Who lives in the neighbourhood? Will we fit in and be comfortable?
- What are the schools like if we decide to have children and stay in the area?