To All the Single Ladies
Over the years, we’ve had many clients who wanted to buy a house when single. They were well qualified, but they couldn’t pull the trigger. Sometimes, it was with good reason… an unstable job or likely transfer out of the area, or simply deciding that in order to buy, they might have to sacrifice their ideal location and lifestyle to make it work. These are logical and very common reasons that some of our clients decide they would rather rent for a little while longer as they iron out the details of their lives.
But all too often, the fear of buying a house before marriage is something else entirely.
They worry about how a purchase might affect their marriage prospects. Some fear that they might seem too intimidating on dates if they owned their own home. They might seem too independent or too tied down if it is someone out of the area. Others worry if they meet the right man or woman and get engaged, they will then have to quickly unload the property.
While all concerns when you are making a big financial purchase or life change are valid, it’s important to remember that buying a home doesn’t define or limit you. It simply adds to your investment portfolio… not to mention gives you a bigger tax break come April 15th!
For those single people who are worried about buying a house before marriage, you’re not alone. Buying a home is a big decision and one that should be considered carefully. Our advice is to make sure you’re being honest about why you may or may not make decisions about buying. Buying a home is a large financial investment; one that pays off greatly over time for most people. It gives them a head start on their real estate investment portfolio and often, the money they make on their first home pays for the downpayment of their move-up home. Time and time again, we have had clients that prove it makes great financial and personal sense to buy. If you’re qualified to purchase a home and are planning to live in the area for the next couple of years, it almost always makes financial sense to buy.
In our office, we like to say nothing looks sexier on a person than real estate – and it’s true!
So many of our clients have found Mr. or Mrs. Right soon after purchasing their home. In fact, in Allison’s first condo building, five of the women who purchased homes in the 13 unit building were engaged or married within two years of purchasing their first condo. Some moved out and sold their unit, some rented it out, while in others the significant other moved in.
We have one client who purchased a townhouse in her 20’s and rented the extra room to a roommate to pay down some of the mortgage. In a few years, she was making more money and was able to live in the house by herself. Shortly after, she met her future husband and he moved in, contributing again to her mortgage. Later, they decided to buy a property together and keep her original home as an investment property. Other clients have sold their property and used the proceeds to purchase a new home with their new significant other. There are so many options!
Of course, we can’t guarantee that you’ll meet “the one” in the elevator of your new condo building like a Hollywood romantic comedy. But, you will have a new sense of self worth and accomplishment to go along with a fantastic new financial investment in your portfolio! Not to mention, now you can decorate and customize your new home however you want now that you are no longer renting.
Buying a House Before Marriage – Should you Buy Before the Ring?
Buying a house before marriage with a significant other can be scary. It’s definitely not for everyone or every couple. While it certainly can make good financial sense, this scenario is tricky and must be thoroughly considered. Tread carefully and be sure to discuss the details with your significant other and your trusted real estate agent. We always recommend also talking to someone with a good insight into your relationship. This could be your best friend, a sibling, parent or neighbor. It’s always a good idea to make sure no one sees any red flags in the relationship!
Would you be purchasing this property on your own or with your boyfriend or girlfriend?
If you’re purchasing it solo, things are much easier. But, there are still things to determine before you make the decision. Will expect your partner to act as your “tenant”? Will they pay part of the rent or utility costs? Or, will you foot all of the house bills? While this conversation might be difficult, it’s important to get it ironed out before you’re too far in the process. Most times, this conversation will go smoothly. Your partner will be happy you’re able to take such an exciting step.
If you’re thinking about buying a place together, there is much to consider and discuss. In this scenario, you need to be certain that you trust your partner implicitly and that you are both in it for the long haul.
When I was in my mid-twenties, I had been dating my now-husband for a few years. We were each considering buying our own condos separately. We weighed all of the options and discussed our thoughts and intentions with each other and our families. Finally, we made the decision to buy a condo together, splitting every little cost and line item down the middle. We could get a nicer place in a more central location in DC, while still saving money. For us, it was a win-win. But, we only made the decision after careful planning.
We enjoyed the condo for almost four years before deciding to buy a townhouse in Old Town. We did very well on the purchase and were able to cover the down payment on the townhouse with our proceeds. The scenario sense for us, but it’s not for everyone. Once you decide to purchase together works for you as a couple, discuss how you will break the finances down. I would recommend coming up with a percentage of each expense that each person will cover.
This would include your down payment, monthly payment, closing costs, utilities, taxes, insurance, furniture, repairs or improvements and any other expenses you anticipate. I highly recommend a 50/50 split if possible. That way, in the event of an unforeseen break-up, it’s easy to divide the assets.
Though I am an optimist by nature, in financial situations, it’s smart to hope for the best but plan for the worst.
Whichever option you choose, it’s a good idea to put it in writing so everyone is on the same page. Once that’s done, it’s time to talk to a lender.
You may also have an attorney draft a written agreement. While I didn’t adhere to my own advice, it would’ve been the smartest way to handle the financial obligations. It’s also wise if either of you is getting financial assistance from your parents or another source, to inform them of any arrangements before you make a decision to make sure they are on board.
Lastly, a note about financing your engagement ring during a home purchase.
If you proceed with buying a house before marriage, and you’re planning to propose before settlement, be sure to pay cash for the ring or be very careful with your financing.
Do NOT take out a loan for an engagement ring while you are under contract on a property. Taking out any loans {be it for an engagement ring, new car, or furniture} can affect your ability to obtain financing and could even cause you to be denied for your loan if your debt-to-income ratio is too tight for the home purchase. Lenders like to see your debt to income ratio lower than 43%. Your debt would include your new mortgage, any other loans such as car loans, student loans, personal property loans, or alimony payments.
One option would be to purchase the ring prior to getting a pre-approval from your lender. Keep in mind that your future spouse might see your credit report on the loan application. So, be prepared to have an explanation for the loan! If you absolutely must purchase a ring during the process, see if a family member can open the loan for you so it doesn’t affect your pre-approval. My recommendation would be waiting to finance the ring until after you have settled on your home. Then you can qualify for a higher number since you will then have a lower debt ratio.
Buying a House Before Marriage – Before You Say “I Do”
The time between the ring and the vows are likely some of the most exciting – and stressful – of your life to date. You’re planning a new life with someone you love, not to mention a heck of a party! As part of your planning, you might even be considering buying a house or a condo together to kick off this new phase. If you’re in a position to buy a house before the wedding, congratulations!
But, before you rush into buying a house before marriage, evaluate your time, your resources – and your sanity!
Why You Should Buy a House Before The Wedding
You’re in a committed relationship and will soon have many shared assets. We work with a lot of engaged couples who feel ready to take on the excitement and challenges of moving while planning a wedding. If you feel like you have the wedding under control and you still have a comfortable amount of money for a down payment, closing costs and home furnishings, the engagement period is an excellent time to buy. You can get settled into your new home together as you put the finishing touches on the wedding planning. Plus, there will be somewhere to store all of the new gifts you will be receiving!
If you decide buying a house before marriage makes sense, make sure you time it right. Most of our buyers take about two months to find the right home, looking at homes once or twice a week. Some find the right house on the first weekend, others take much longer! Be aware of your motivation level and the available housing to see how long it might take you to find “the” house. From there, it will be 30-60 days until you can buy it and move in. During that time, you’ll be working on your loan documents and preparing to move. You won’t want your move date to be too close to your wedding. Trust me, you’ll thank me later!
Why You Should Wait Until After The Wedding
As you know, when you’re engaged, life isn’t always easy. A million and one decisions, disagreements with your fiance or parents, timelines and deadlines, making time for other weddings, showers and bachelor or bachelorette parties… you have a lot on your plate. Say nothing of your declining bank account! Many couples feel that between the stress or financial impact of planning a wedding, they don’t have the time and money available to dedicate to the search. Between looking for and financing a home purchase and then making the physical move, it can be a lot to take on buying a house before marriage even happens.
If you are someone that is easily overwhelmed or does not like to multi-task, I definitely would recommend waiting until you return from your honeymoon to focus on buying. Another good reason to wait might be to have more cash on hand. Some couples we have worked with have saved all the money they received from their wedding to use towards a downpayment or furniture.
Note: If you financed the engagement ring and are still making payments, you might be pre-approved for a higher purchase price once the ring is paid off. That will improve your debt to income ratio, giving you another reason to hold out buying a house before marriage a little longer. Even if you decide to wait until after the wedding, it is a good idea to start keeping an eye out for the right property.
We can set up a search for you to monitor so you’ll be ready to move on the right place when you get back. One couple we worked with recently looked for six months the wedding whenever time allowed. As soon as they returned from their honeymoon, they were under contract on their new home within a week.
Buying a House Before Marriage – To Buy or Not to Buy…What’s the Bottom Line?
Just over a year and a half ago, I too was engaged and (mostly) happily planning my upcoming August wedding. As a Realtor, I know the time involved in buying and selling a house. I was not planning a move until several months after the wedding. The world had other plans. The perfect place popped up on our radar six months before the wedding. We were hooked and had to have it.
We quickly wrote an offer contingent on our home selling. Within a few days, we quickly prepared our condo for sale and negotiated a full priced offer with no contingencies. A month later, the townhouse was ours. We moved out of our beloved DC condo and into our new home. It was a whirlwind! But, I don’t regret making this move, because it was just the right place for us. I also had an amazing wedding planning team at A. Dominick Events who handled every detail of the planning process seamlessly. Highly recommend! Carefully think through if you people to help lighten the load for you and make the process easier.
So, is moving in the midst of wedding planning for everyone?
The easy answer is if you are financially qualified, buying a house before marriage makes sense and you should go for it. But, realistically, you need to weigh your options. Want to chat further? Great! You can schedule a buyer’s consultation here.
BEST WISHES!
