First comes love. Then comes marriage. Then comes… the purchase of your first home!
Usually after getting married, the next exciting step is purchasing your first home together. While it might all seem like fun and games while home shopping, it’s important that you go over important questions before making the big purchase. Daniel Bortz from Realtor.com, identifies some of the questions that you and your loved one should ask each other before buying your first home.
What’s your credit score?
Back in your dating days, you two probably talked about everything from where you’ve traveled to your favorite movies. But now, as newlyweds, it’s time to get serious and broach a far less romantic topic: your credit scores.
In fact, if you’re truly smart, you will have had this conversation already: Half of married couples in the U.S. say that credit scores were a make-or-break factor when choosing their mate, according to an Experian Consumer Services survey. But for other couples, credit is a taboo subject. Unfortunately, if one person’s credit score is substantially lower than the other’s, that could hinder the couple’s ability to qualify for a loan, or at least get an attractive interest rate.
“Knowing your credit scores before you meet with a lender is crucial,” says Wright. Doing so will also give you the opportunity to work on repairing any credit issues before you apply for a mortgage. You can also get a free copy of your full report at AnnualCreditReport.com, although for the exact score you’ll need to pay a small fee. Or check with your credit card company; many offer free access to scores.
Where would you like to live in five years?
Your future goals will affect which type of home—and loan—is right for you. For instance, if you’re planning to stay put for the foreseeable future, then a 30-year mortgage with a fixed interest rate may make the most sense, since this means your interest rate (and monthly payment) remains constant over the life of the loan.
On the other hand, if you’re planning to move within a few years—say, to a larger home to raise a family or move closer to your in-laws—then you should consider other options. For instance, an adjustable-rate mortgage offers a lower interest rate than a fixed mortgage for an initial period of time, such as three to seven years. After that point, it can adjust up or down based on market indexes.
Check out the full article: The Newlywed’s Guide to Buying a Home
