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As of June 25, 2018, we’ve made some changes to the way our mortgage approvals work. You can read more about our Power Buyer ProcessTM.

One of the biggest recent decisions my fiancé and I made was buying our first home before we get married this summer.

We started collecting all of our income documentation and credit information to begin the home buying process just a few short months before the wedding.

However, as first-time home buyers, we had no idea how to buy our first house as an engaged couple; not to mention, how to search for the perfect home based on our wants and needs.

To help you and your spouse-to-be avoid stress, here are a few things the both of you can expect when buying a house: from the mortgage application process to starting the house hunt.

Getting a Mortgage When You’re Engaged

If you decide to purchase a home with your fiancé(e), there are a few benefits when you put both of your names on the mortgage.

For example, if you’re part of a two-income household, you may qualify for a larger home loan compared to a single-income household.

Additionally, if you and your partner are on the mortgage, you’ll both get the benefit of building your credit history.

However, if you plan on getting a mortgage with your future spouse, there are a few circumstances you should consider.

For example, if your partner has a low credit score, this could hurt your chances of approval. In this case, one of you can apply for the mortgage alone and then add your partner to the loan a few years later when their credit score has improved.

Additionally, both you and your partner need to have sufficient income to meet the requirements. For example, the 2/2/2 rule is standard for all documentation requirements, including:

  • Two years of bank statement stubs
  • Two years of W-2s
  • Two years of tax returns

If one of you can’t meet these documentation requirements, you may want to leave you or your fiancé(e) off the mortgage.

Getting a Mortgage Alone

Should you or your future spouse decide to get a mortgage alone, there are some legal agreements you might want to pursue based on your personal preferences.

Dan Green, founder of financial education website Growella, suggests drafting two separate legal agreements. These agreements are known as a Cohabitation Agreement and a Property Agreement.

“This is recommended because a couple who’s engaged hasn’t commingled their money yet, and everyone should have some protection,” Green explained. “It’s not a ‘break-up’ that you’re necessarily worried about – it’s death or some other catastrophe, too.”

The Cohabitation Agreement, according to Green, describes each person’s financial obligation to the home and states which person is responsible for paying:

  • Mortgage
  • Real estate taxes
  • Homeowners insurance
  • Down payment
  • Necessary repairs

It also includes what happens to the house in the event of a break-up or death of one party.

The Property Agreement describes the physical property you accumulate while living together, such as furniture or televisions, and what happens to those items if one or both parties move out.

Get it In Writing

In addition to the Cohabitation and Property Agreements, there are other ways you can protect yourself or your fiancé(e) and make smart financial decisions before you sign on the dotted line.

First, if one of you won’t be on the mortgage, take time to discuss your budget and decide who pays for each expense, like household expenditures, utility bills, mortgage payments and repairs. This is especially important if you don’t plan on combining finances.

You’ll also want to decide who will be on the title. When you aren’t on the mortgage or title, you have no legal interest in the house. This means if your partner holds the mortgage and the title and passes away, you may not be able to stay in the house and continue to pay the mortgage.

The most important factor is to seek out a real estate attorney and have a notarized legal agreement created to protect your assets.

You’ll want to make sure this is completed and made clear before you begin the house hunt.

Starting the House Hunt: Your Top-10 Must-Have List

The moment my fiancé and I were preapproved for a mortgage, the temptation was high to pop a bottle of champagne and dive right in to the house hunt. However, before we picked up the phone to call our REALTOR, we sat down together to jot down our top 10 must-haves.

The “Top 10 Must-Have” list is completed separately by each partner and is comprised of the top 10 characteristics you are looking for in a home. The goal of the list is to find the shared characteristics you and your partner want in a home. This will serve as a foundation when the house hunt begins.

Here’s the kicker: My fiancé and I, similar to most engaged couples looking to buy a home, are first-time home buyers. We didn’t even know what we should be looking for in a house, let alone what we wanted.

We had to research the common characteristics people look for in a home to figure out what we wanted.

We found that home buyers commonly consider:

  • Location
  • Lot size
  • Age
  • Curb appeal
  • Walkability to local shops and sites
  • Security/privacy
  • Design/floor plan
  • Room count
  • Indoor/outdoor entertaining
  • Garage capacity
  • Closet and storage space
  • School district
  • Updated electrical and plumbing

From that list, we found we had shared interests in:

  • Location
  • Design and floor plan
  • Room count
  • Garage capacity
  • Closet and storage space
  • Updated electrical and plumbing

Compromise Is Key

Just like any relationship requires a little give and take, house hunting with your future spouse requires compromise.

That being said, what if you both want different things?

One way to avoid conflict is to individually rank your shared “must-have” items from most important to least important and compare your results.

For example, my personal “must-have” list looked like this:

  1. Location
  2. Updated electrical and plumbing
  3. Design and floor plan
  4. Room count
  5. Garage capacity
  6. Closet and storage space

While my fiancé’s looked like this:

  1. Garage capacity
  2. Updated electrical and plumbing
  3. Location
  4. Closet and storage space
  5. Design and floor plan
  6. Room count

As you can see, location was the biggest factor for me. But it wasn’t necessarily a must-have to my fiancé.

Currently, he has a 15-minute work commute while I drive over an hour. We decided to pursue a more central location for our future home so that we each have an even half-hour drive to work. Since location wasn’t a top factor on his list, he didn’t mind adding an extra 15 minutes to his commute.

Almost every home decision will require a little give and take. The key is open and clear communication on the things you desperately need versus something you could possibly live without, especially if this is your first home.

If you and your future spouse are ready to take the leap and purchase a home together, talk to a Home Loan Expert today and learn about your options. If you prefer to get started over the phone, you can call (888) 980-6716.

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