Questions Before Buying a Home with Your Partner
Buying a home is among the most significant financial decisions you’re likely to make in your life, and it’s likely to be a great investment, which is why it’s highly recommended that you and your partner are on the same page. While buying a home is a joyful and fulfilling experience, it’s also stressful because of the lengthy process as well as the potential for hurdles that must be deftly navigated. Before you start searching for your dream home, you and your partner should have a lengthy discussion about what you both want out of this purchase and what your overall long-term vision for the purchase is.
What Is Our Budget?
Among the most important things you should discuss with your partner when thinking of buying a home is what your budget will be. Along with your current monthly expenditures and financial responsibilities, owning a home will require you to pay more bills, which you can take into account by creating a budget.
When making a budget, map out all your current assets, income, savings, and additional financial streams. Remember to be honest with yourself, so you don’t stretch yourself when it comes time to make payments. Some questions that you should ask about your financial situation include:
• How much debt do we currently have?
• How much savings are needed before making an offer?
• Do student loans or credit cards need to be paid off?
• Can we reduce our monthly expenses?
Are We Searching for a Starter Home or a Long-lasting Home?
You should then discuss what type of home you’d like to buy. Do you want the property to act as a starter home that you live in for a few years before moving to a more permanent location? Instead, you may want to purchase a forever home where you’ll start a family and settle down for many years. Even if you want a starter home, your partner may be anxious about moving multiple times in just a few years. The answer to this question can help you make the right decisions throughout the home-buying process.
What is Your Preferred Timeline for Finding Your Dream Home?
Deciding when to buy a home is just as important as knowing if you want to buy a home. You and your partner likely have jobs, personal lives, family, and friends that takes up your time. If you and your partner believed that finding a home can be done in a short period of time, this might not be an issue. On the other hand, you might want to take your time to search for the perfect home. If you need to improve your finances before buying a home, make sure to factor this into your timeline. Some of the questions you and your partner should discuss about the timeline for buying a home include:
• Are you alright with pausing the home-buying process for several weeks depending on possible hurdles?
• Do you believe that the home-buying process can be completed in less than a year?
• Do we have any life events or traveling that’s set to occur in the near future?
What Expenses are We Overlooking?
There are some expenses that you and your partner may be overlooking, the primary of which include:
• Moving costs
• Closing costs and other mortgage fees
• Property insurance
• Ongoing property maintenance
Don’t forget to add these expenses to your budget.
How Much Do We Need to Save?
One question that you and your partner should discuss before you start searching for the right home involves the amount of money you need to save before this purchase is doable. Knowing the amount of money, you can afford allows you to identify how much you need to save before making an offer on a home.
While making a down payment of 20% or higher allows you to avoid paying for private mortgage insurance, you can still purchase a home with a down payment of 5-10%. Some loans come with down payment requirements of as low as 3%. Make sure that your savings also cover moving costs, closing costs, and a few months of mortgage payments.
If you and your partner are able to answer all of these questions and come to an agreement in most areas, you should be ready to buy a home. Once you’ve identified your budget, set a clear timeline, and figured out how much money needs to be saved, it will likely be easier for you and your partner to avoid making costly mistakes.