Money and Relationships: Buying a House Together

Buying your first house with your spouse may seem like an extremely daunting task, and there’s a reason for that: it can be difficult. With so many options swimming through your heads, the house-buying process is often a little overwhelming. And agreeing on the price, location, amenities, style, etc. can be trying. So how can you and yours decide on the perfect home together? Let’s take a look at some ideas.

Decide on a Price Point

The first step in home purchase is deciding on a price point. As mentioned in our “Agreeing on the Price of Your First Big Purchase” post, there are a few ways to decide on that perfect purchase price together, including visiting a mortgage calculator site, talking with parents and talking to a mortgage broker. With a little help, you and your spouse can decide how much house is right for you.

Become Pre-Approved

The next step, either before or after you decide on a price point, is to talk to your local mortgage professional. This person will look over your finances to make sure you’ve chosen the right price point. If you did not choose a purchase price on your own, the mortgage lender can lead you and your spouse in the right direction.

Then, depending on your lender, you may be pre-approved for a dollar amount or you may have to wait a few days to become pre-approved. In either case, the lender will tell you the top dollar amount the bank will loan you, which can help you decide on that perfect house together.

Additionally, the mortgage lender will issue you a pre-approval letter. This can be your ticket to buying that dream home if there happens to be a bidding war. In this case, the seller can determine with a glance that you are ready to close as quickly as possible.

Scope Out Some Houses

Now that you know how much cash you have available, you can check out some houses in your price range. You can do this alone or with a realtor, but I have to tell you: it is much easier to purchase a home with a realtor’s help, especially when trying to decide on your must-haves together (I think our realtor saved our marriage!).

As you and your spouse look at the houses, remember to be open to compromise. You or your realtor will try to find a house with all of the items on your wish list, but that may not always be possible. Talk together about the items you may be willing to compromise on. Together you can decide if an almost-perfect house (maybe a house with a carport rather than a garage) will work for you as a team.

Relax

The final step in buying a home together is to relax; to make the process more fun and less stressful. If you have the luxury of looking for an extended period of time, spend as long as you wish to find the perfect home. If your time is limited, relax your wish list a little.

As you and your spouse look for your first home, you can compromise your way to your ideal. Knowing the steps you will encounter and realizing you can relax should help your search become a fun process…or at least not a total nightmare. You truly can find that perfect home together.

Any other first-time homebuyer tips from our readers out there? How did you and your spouse find your home-buying compromise?

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Anonymous's picture

insurance advocate wrote:

Wed, 06/01/2011 - 14:38 Comment #: 1

Good advice as always, Christa!

I would emphasize that the mortgage lender is in business for their employer (i.e., the bank), and may encourage you to shop near the top of your price range, even if it might be a stretch for your budget.

Before the housing bubble collapsed, some mortgage lenders had a nasty reputation for pushing buyers into homes they couldn't afford. This was definitely the case when my wife and I bought our first home nearly 10 years ago, but fortunately we found a nice home at the lower end of our price range. We took a mortgage for about 67% of what the lender hoped we'd spend, and even that turned out to be about all we could afford without slashing our household budget.

Also, first-time home buyers should know that if they make a downpayment that is less than 20% of the mortgage's value, they'll likely have to pay for PMI (private mortgage insurance). For most home buyers, this translates to an extra $50 to $200 per month on their monthly mortgage payment. (For a detailed explanation of how PMI is calculated, see my post here: http://www.cheapinsurancehq.com/How-Much-Is-PMI-Insurance.html)

Christa Palm's picture

Christa Palm wrote:

Wed, 06/01/2011 - 20:54 Comment #: 2

Insurance Advocate: Thanks for all your awesome tips! Sorry to hear your lender pushed you into a budget-busting home. There were many lenders during the era who did so (that darn greed!). You're right: those new buyers out there should keep in mind their comfort levels when purchasing ~ how much can their budget and lifestyle comfortably afford?

Great point about PMI, too. I didn't mention that here, but it is a very important part of the mortgage process. The lender will discuss this option with the buyer if it is needed, and it does tack a pretty penny on top of the mortgage payment each month.

Anonymous's picture

MoneyCone wrote:

Fri, 06/03/2011 - 02:48 Comment #: 3

One thing we discovered early on was that we are not going to get everything we'd like in a house!

It was a compromise. But worked out pretty well in the end. Also don't fall in love with any house before the deal is finalized!

Christa Palm's picture

Christa Palm wrote:

Fri, 06/03/2011 - 16:17 Comment #: 4

MoneyCone, definitely! Finding everything on your wish list during a house search is almost impossible. Great tip on not falling in love with a house before you have the keys in your hand ~ you never know what can happen!

Anonymous's picture

portland mortgage wrote:

Mon, 09/05/2011 - 09:36 Comment #: 5

I think this is one of the best ways to express your opinion together to enhance your properties and relationship as well.

Christa Palm's picture

Christa Palm wrote:

Tue, 09/06/2011 - 16:00 Comment #: 6

Portland, thank you! Good luck in your business!

Anonymous's picture

Finances and Relationships - Taking on Tough Topics | MomVes wrote:

Sat, 01/21/2012 - 18:00 Comment #: 7

[...] Ready to take the next big step together? Here are tips for purchasing a home together. [...]

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