You have two big contracts to sign. One says you’ll stay with the same person and the other one says you’ll stay in the same place. So which comes first: The mortgage or the marriage?
Home ownership and holy matrimony are both very real, exciting, life-changing commitments. It’s not unusual for both of these commitments to present themselves right around the same time. Which one should happen first? Some couples begin house-hunting ahead of their nuptials and others wait until after tying the knot to buy their first home together. The best approach for you and your sweetie depends on several factors. Below are two arguments: One argument favors a marriage-first approach and the other favors mortgage-first. It’s up to your and your main squeeze to decide which order fits best into your overall life plan.
Some couples want to focus 100% on the wedding day. House-hunting could prove a worrisome distraction if your priority is a fairy-tale wedding. If planning the big day requires a great amount of your attention, you may want to wait to buy a house until after the big day has come and gone. The same logic applies to your disposable income: If you’re going all-in on the wedding, taking on the financial commitment of a home purchase might not be in the cards just yet. Waiting will give you time to settle after the wedding and may also provide time to save for a down payment.
Also, remember to consider your credit. Putting both spouses on the loan application increases your buying power, if and ONLY if both of you have good credit. If one of you has credit blemishes, you may want to consider putting just one party on the application even though you’re already married. It is possible to add the other party to the title of the home without including him or her on the loan. However, it is important to remember that excluding the spouse or fiancé with poor credit means you’ll have to exclude his or her income as well.
Couples sometimes choose to put the house before the honeymoon, and for good reason. A home is a big financial commitment and the sooner you start chipping away at the principal the better your finances will look down the road. If both you and your fiancé are reasonably sure of where you want to live, work, and play, then house-hunting before marriage usually makes sense. Unmarried borrowers can still get on the same loan together, so house-hunting before the wedding shouldn’t make a difference with respect to your loan terms. Also, owning a home together does not necessarily mean that you need to cohabitate. As such, moral and social objections can be circumvented with separate living arrangements during the post-closing, pre-marriage days.
One additional factor that unmarried borrowers should address with their Loan Officer is title. Two people can take title to a property in different ways. It’s usually not a huge issue unless you have heirs or dependents – Some forms of title automatically transfer to dependents upon death but others transfer directly to the other home owner. Address these nuances in ownership when you make your loan application.
Whether you put the home first or the wedding – Congratulations! Both of these life changes are exciting new beginnings. Ruoff Home Mortgage wishes you all the best!
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