Buying your first home can be one of the most exciting experiences in your life, especially if you are sharing it with your new spouse. Not only may you be eager to build a home where you can create many meaningful memories together, but you may also be making one of the most expensive and significant purchases of your life.
Before you make an offer on your dream house, it is important to make sure that you and your spouse are financially prepared to close the deal. As first-time home buyers, consider the following tips to ensure your financial security before purchasing a house:
- Determine how much of the house you can afford -- It is important to make sure that you can afford your house before making an offer. Ensuring this may require you to budget for your home payment, considering the many other expenses you might have, such as health insurance, car payments and student loans. Try paying no more than 30 percent of your gross monthly income for your house. This can help you feel financially comfortable to make your purchase rather than feel like you are emptying your bank account to do so.
- Protect your credit score -- Before you apply for a mortgage, you may want to make sure that you will qualify for one. Lenders may consider your credit score to imply your reputation as a borrower. To help preserve a healthy credit score, consider limiting your card usage in the months leading up to your mortgage application. Make sure to pay any remaining credit card payments you may have in a timely manner. Likewise, avoid taking on any new loans, such as for a car or for a business investment. Keep in mind that applying for a mortgage with your spouse means that both of your credit scores may be considered, and not just your own.
- Save for your down payment in advance -- Your down payment could cost as much as 20 percent of the total price of your home, and it is worth saving up for it as early as possible. Making a down payment is the least you may be required to pay when closing your deal, and you may want to be ready to do so when the time comes. In the months before making your purchase, consider setting up an online savings account that can hold and even grow your money.
Being prepared pays off
As overwhelming as purchasing a home may be, ensuring that you are financially prepared to do so can ease the process. When you and your spouse have taken the necessary steps to secure your financial health, your confidence may outweigh any stress that can come with closing a real estate deal.