Do you know that serious couples decide to buy their first-home on their engagement day? Real estate is a budding industry among young couples. It brings great joy to see a set of bright, shiny home keys. According to a recent study, 78% of couples want to buy a new home. And, 40% of these couples want to buy a property before marriage. In fact, some of them decide to move-in before tying the knot.
Luckily, the real estate industry supports young buyers. It delights them with many fascinating benefits like improved rental charges and low-interest mortgages. These options make the real estate industry an attractive one.
On the other hand, there are few things you should keep in mind before buying your first property. This article focuses on these important factors.
#1 – Know Both Of Your Incomes
First of all, you must be aware of your partner’s income. How much do you make and how much do you wish to save? These figures will decide the properties you can afford. Meanwhile, you must be aware of your partner’s credit score. When couples decide to buy a property, they are stepping into a firm business agreement. The home they buy will be a stable form of investment. And, it will have a direct impact on the credit score of both the partners. If your partner has a poor credit rating, it will have an impact on the property’s title. Most of the time, the property will be given to the person with a better credit score.
#2 – A Joint Account
Have you considered starting a joint bank account? A lot of young couples are apprehensive about this step. However, there are many benefits in opening a joint account. Remember, the joint account will not be your only account. Instead, it will act as a secondary source of funds. Joint accounts can be used to handle insurance policies, property taxes, loans and maintenance charges. It would be great if both the partners create automated monthly deposits from their salary (or income) account to the joint account. Additionally, joint accounts will help you budget and track home expenditures.
#3 – Cosigning
“Cosigning” is a big move. The moment you decide to cosign on a loan, you will be responsible for the debt. Even if your relationship becomes sour, you cannot stop paying the mortgage. Likewise, if your partner loses his/her job or stops paying the loan, you will be obligated to repay. This is why you must choose properties that can be handled with your income. Both the partners should be able to handle the loan individually! This tip will help you in the long run. When a partner gets injured or falls ill, you will still be able to repay.
Before you decide on a budget, sit down and talk to your partner. Understand if they are prepared to handle a loan. This conversation should be honest and mature. Remember, you cannot live with a debt that one of you is uncomfortable with.
#4 – Documentation
No matter how close your relationship is, everything must be documented. Approach a real estate attorney and document your decisions. If you have decided on a partnership agreement, it must be documented. The document should be clear about your responsibilities and decisions. For example, the amount to be paid by you and your partner should be documented. Likewise, you must decide on what should happen if the relationship breaks.
#5 – Title
Properties need a title, and young couples should name it right. The title defines who owns the property. Titles can be categorized into three stages:
- Sole ownership
- Joint partnership
- Tenants in common
#6 – Save
Last but certainly not least, start saving at an earlier stage.
When you’re ready to buy a property, then search our real estate directory to find a licensed realtor near you.