Couples Buying Their First Home: A Comprehensive Guide
When You Start to Dream, Start A File
Begin a file for canceled rent checks and the BANK STATEMENTS that these checks have come out of. There is a likelihood you will be asked for the records of BOTH, regardless of your credit or down payment, when you buy your first home. Pay your landlord in a timely manner – there is every likelihood that a lender will want to contact same regarding your payment history. A lender for a first-time home buyer will likely want your landlord’s contact information, too. Keep this in mind (and send some flowers with your timely rent checks every now and again).
Check Your Credit
Is it possible for one person to obtain a mortgage (even if you’re married) without the other? Absolutely. You can check your credit for free, and pay a nominal sum for obtaining credit reports and FICO scores.
RELATED: 9 Fast Fixes For Your Credit Score
Seek some advice from a reliable lender (see the next item). If one of you has a less-than-perfect credit score, you may be able to get a loan using only one income source and one credit score. This does not come without its caveats—if you are married, your spouse’s DEBT ratio will be factored into what you can afford. Unfortunately, his or her income WILL NOT be counted (seems so unfair, but its true).
If you aren’t married but want to buy a home with a significant other with credit issues, begin discussing this scenario as soon as possible. There are fantastic programs to assist home buyers with a purchase, with anywhere from zero percent down to five percent down depending on your credit and location for purchase. And home ownership has so many benefits over renting that if you are planning on being in the same place for 3-5 years that I won’t even begin to elaborate….you likely already know.
Love Your Lender
In addition to the items above, start keeping track of your assets, even if they aren’t fluid assets (IRAs, 401Ks) and take the initiative to discuss your situation with your lending institution. Seek advice from your accountant, too. When you begin working with an agent or broker, they will also likely have additional recommendations for lending sources. Sometimes a “brick and mortar” lender is a great source if you have a long track record and several accounts with your lender.
RELATED: Will I Qualify for A Mortgage?
There is a caveat: “shop around” in a responsible manner. You do NOT want your credit score checked multiple times (it will have a negative impact on your score). Keep a copy of that credit score you pulled and begin your discussion with that report for your initial meetings and discussions.
Love Your Agent
You have probably searched online. You’ve probably looked at homes on Zillow, as well as Agency Websites like Patrick Parker Realty.
If you are working with an ethical Agent, he/she can’t/won’t show you homes that you have already seen with another agent (there are exceptions to this rule, such as seeing a home at an Open House if you do not have a Buyer Agency agreement, but discuss this scenario with a reputable agent first).
RELATED: How To Find The Right Buyer’s Agent
To put it simply: If you see some homes with an agent that does not suit your needs or personality type, you may, in certain circumstances, be limited to working with that agent if you want to purchase a home that you have seen together, regardless of whether you want to work with that agent or not.
If you have been pre-approved for a $250,000.00 loan limit, don’t expect your agent to show you homes priced at $300,000.00.
FREE DOWNLOAD: How Much Home Can I Afford?
Know and respect your limits. And check out the Patrick Parker Realty Affordability Calculator.
Watch Your Spending
Now, more than ever, if you have a property purchase in mind, keep your spending and credit in mind. DO NOT open store accounts, even if you are offered 10% off your purchase at the register – these will be new accounts on your credit records. DO NOT start purchasing furniture – no matter how much of a bargain it may be at the time, if you have to finance the purchase. DO NOT purchase a new car (even if you work for a motor corporation and have the option of purchasing one every year. Watch your credit card balances, don’t charge more than 35% of your credit limit at any time, and pay off in full every month (words of wisdom for your lifetime).
Odds and Ends
Often, with a rent payment, you aren’t used to budgeting for things like specific utilities. Have you researched the cost of ALL utilities, as well as homeowners insurance and taxes, on your purchase? Discuss these items with your lender and your agent.
Enjoy Yourself, But Be Serious
This is a VERY exciting time in your lives. Be serious about your search. Narrow your search to realistic properties, discuss your choices with your agent, and try to allow for serious showing time. If you can carve out a niche where you can tour while you have a babysitter (if needed) or leave mom and dad at home (THEY are NOT the buyers), all the better.
If you want Mom, Dad, the kids and even the dog at the SECOND showing – that’s okay. At least you’ve narrowed down your choices by that time.
Couples buying their first home have the luxury of knowing that this will be one of the most exciting events of their lives. It will be exciting, memorable and probably a bit stressful, but ultimately REWARDING.
Are you and your significant other about to venture out on a first-time home buying journey? What challenges are you facing? Did you and your significant other just buy your first home? What advice do you have to offer based on your experience?
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