Most couples today prefer living together for a while before getting married. This gives them a first-hand experience of what it feels like to commit to one another for the rest of their lives. At this point in life, it only makes sense to buy a house rather than renting one, right?
Inasmuch as it sounds straightforward, there are actually several factors that should be considered before making such decisions. Is there any difference between buying a house before and after marriage? Does it have any effect on home loan rates applied?
This article aims to answer these and other similar questions.
What’s your priority as a couple at the moment? You need to ask yourselves this question before deciding on whether to buy a home before getting married. Keep in mind that home-buying can have a huge impact on your financial situation, both as an individual and as a couple.
As such, if you’re planning to get married any time soon, then it would be wise to do it first before committing to home-buying loans.
It’s worth noting that your mortgage application is barely affected by the fact that you’re married. The main things considered during loan approval include one’s income and credit history. As an individual, there’s no shortcut when it comes to such factors. Your credit history needs to be convincing enough for the lender to finance your project.
However, when you apply as a married couple, you’ll have a better chance of success because both your credit scores are taken into account. For instance, if your partner has an excellent history while yours is tainted, then the partner’s credit score will be considered.
Keep in mind, though, that when you choose to use one person’s credit score, then it’s their income that’ll be taken into account. Such a scenario may not be a problem for you as an individual, but you’ll still need to make sure that it’s okay for your partner. Remember this single income should be enough to finance the loan. Therefore, while discussing your money management options as a couple, it’s important to mention this factor and see where you stand.
Another factor that’s worth keeping in mind is the laws set within your State. This is something that’s not consistent across all countries. Therefore, it would be prudent to go through the laws within your locality.
Take note that some States don’t allow two couples to apply for dual ownership of a home if they’re not legally married.
Whose name will be in the record books? This is a very important question considering what’s at stake. When you purchase a property as a married couple, you’ll both share the ownership. Therefore, in the case of death or divorce, the property will be shared equally.
However, when the buying process is done while you’re not legally married, the dual ownership isn’t automatic. In such a case, you might need to find a real estate attorney to avoid any complications in the future.
Buying a home can be as exciting as getting married, but you’ll need to decide which of these comes first. There’s no straightforward solution to your dilemma. However, you should weigh the pros and cons of both cases as a couple.
For instance, dual ownership isn’t guaranteed when you purchase the property before marriage. Credit scores of both partners and State laws also play a crucial role in your decision-making process. Having a good idea of what these factors mean for you and your partner is the first step in the right direction.