Congratulations on tying the knot! Now that you’re preparing to say “I do,” it’s time to embark on another exciting adventure together—buying your first home. But with stories of bidding wars between buyers, stubborn mortgage rates, and more demand for housing than supply can keep pace with, it may seem next to impossible to purchase a home these days. Have no fear! We teamed up with Georgia Realtor, Kellie Krull, to give you some tips on how to navigate the occasionally choppy waters of the home-buying process. Without further ado, let’s dive in!
Is it better to buy a house before or after you get married?
This answer will be different for every couple. It depends on a multitude of factors, including your individual financial circumstances, priorities, and your long-term goals as a couple. Whether you decide to buy before or after marriage, discussing your finances, future plans, and housing preferences is crucial. Are both of you financially prepared for the responsibilities of homeownership, including mortgage payments, maintenance costs, and property taxes? Also, consider your long-term plans as a couple. Perhaps one spouse needs to relocate for career advancement, or maybe you’ve always dreamt of starting a family in a certain state. Be sure to discuss these possibilities up front to see how homeownership fits into those plans.
What are the first steps newlyweds should take before buying a house?
As exciting as it is to buy your first home as a married couple, you may still wonder, where and how do we even start? Check out some preliminary steps that newlywed homebuyers should consider taking:
Examine your combined finances
Sit down together and review your combined income, savings, debts, and credit scores. This will help you determine how much you can afford to spend on a home. You can even use online mortgage calculators to get a rough estimate.
Set a budget
Based on your financial assessment, decide on a budget for your home purchase. Don’t just focus on the price of the home. Remember to factor in “hidden expenses” like property taxes, insurance, maintenance, and utilities.
Save for a down payment
Start saving for a down payment, which is typically a percentage of the home’s purchase price (more about this later). The higher your down payment, the lower your monthly mortgage payments and potentially better loan terms.
Get pre-approved for a mortgage
Contact lenders to get pre-approved for a mortgage. This involves providing financial documents and allows you to know exactly how much you can borrow. Pre-approval also signals to sellers that you’re serious buyers. This is key in today’s red-hot real estate market. If you find a home within your budget that you’re in love with, chances are you’ll have plenty of competition. You’ll want to be able to move as quickly as possible by submitting an offer. Being pre-approved allows you to do just that.
Consult with a real estate agent
Find a reputable real estate agent who knows the local market well. They can provide valuable insights, show you homes that match your criteria, and negotiate a competitive offer on your behalf.
Do you get a better mortgage rate if you’re married?
In general, being married doesn’t directly affect the mortgage rate you qualify for. Mortgage rates are primarily determined by factors such as your credit score, income, debt-to-income ratio, the loan amount, and the lender’s current rates and policies.
However, there are some indirect ways being married could potentially affect your mortgage rate:
- Combined Income and Debt: If you and your spouse apply for a mortgage together, the combined income and assets of both borrowers may strengthen your overall financial profile. This could potentially help you qualify for a larger loan amount or better terms, depending on your debt-to-income ratio and other financial factors.
- Credit Scores: Lenders typically consider the credit scores of both applicants when evaluating a joint mortgage application. If one spouse has a significantly higher credit score than the other, this could positively impact the interest rate offered by the lender.
- Joint Ownership: If you and your spouse co-own the home as joint tenants or tenants by the entirety (depending on state laws), this may provide additional security to the lender, potentially leading to a better interest rate.
Remember that while being married can have some advantages in the mortgage application process, such as combining incomes and assets, the specifics will depend on your individual financial situation and the lender’s criteria. It’s always a good idea to shop around and compare mortgage offers from different lenders to ensure you’re getting the best rate possible based on your circumstances.
Will a bad credit score affect our ability to buy a house?
The bad news? Yes, especially if you are applying for a mortgage jointly with your spouse or if your spouse’s credit is also considered during the application process.
Lenders consider the credit scores of all applicants when evaluating a joint mortgage application. Depending on the type of mortgage you obtain, lenders typically require a credit score of at least 580 to 620. If one or both spouses have bad credit, it can make it harder to qualify for a mortgage or result in higher interest rates and less favorable terms. This means you may end up paying more in interest over the life of the loan, which can increase your monthly mortgage payments. Bad credit can also affect the amount you qualify to borrow. Lenders may offer a lower loan amount or require a higher down payment to mitigate their risk.
Ways to improve your mortgage application
Ready for some good news? There are several things you can do to become a more attractive candidate to mortgage lenders:
- Improve Your Credit Score: Obtain copies of your credit reports from all major credit bureaus (Equifax, Experian, and TransUnion) and dispute any errors or discrepancies. Improve your credit score by paying bills on time, reducing credit card balances, and addressing any past-due accounts or collections.
- Build a Stronger Financial Profile: Focus on building your savings and reducing debt.
- Seek Professional Advice: Consider consulting with a financial advisor or credit counselor who can guide you on improving your credit and preparing for homeownership.
While bad credit can be a challenge, it’s not necessarily a permanent barrier to buying a house. With a little bit of proactive financial planning, you can work towards achieving your ultimate goal of homeownership.
How much should you put down on a house?
You’ve probably heard that you need to make a down payment equal to 20% of the home’s purchase price. However, this isn’t exactly a hard and fast rule. Your down payment amount will depend on several factors, including the type of mortgage you’re applying for, your creditworthiness, and the lender’s requirements.
- Conventional Loans: Conventional mortgages typically require a down payment of at least 3% to 20% of the purchase price. The exact amount depends on factors like your credit score and financial situation. If you put down less than 20%, you may be required to pay private mortgage insurance (PMI), which protects the lender in case you default on the loan.
- FHA Loans: FHA (Federal Housing Administration) loans are popular among first-time homebuyers and typically require a minimum down payment of 3.5% of the purchase price. FHA loans are more lenient with credit requirements, but also require upfront and annual mortgage insurance premiums.
- VA Loans: VA (Veterans Affairs) loans are available to eligible veterans, active-duty service members, and certain members of the National Guard and Reserves. They often require no down payment or a very low down payment. VA loans also do not require PMI.
- USDA Loans: USDA (U.S. Department of Agriculture) loans are designed for eligible rural and suburban homebuyers and typically require no down payment. Like FHA loans, USDA loans also require upfront and annual mortgage insurance premiums.
Explore your mortgage options and speak with multiple lenders to understand their specific requirements and the down payment options available to you. Many lenders and even local government programs also offer down payment assistance for first-time homebuyers. A larger down payment can lower your monthly mortgage payments and reduce overall interest costs. Fortunately, there are loan programs that allow for lower down payments, making homeownership more accessible for many home buyers.
How a prenup can outline ownership
Whether you’re married already or not, you can ensure that your brand-new house purchase is protected in the way that you see fit. If you’re not married yet, you can get a prenup, and if you are already married (depending on your state), you can get a postnuptial agreement.
With a prenup or postnup, you can outline who owns the house in the event of a divorce. In addition, you can ensure that either person financially contributes to the mortgage or improvements to the home, and that they are reimbursed in the event of a divorce. For example, let’s say John and Alice want to buy a home one day. In their prenup, they note that all real estate assets will remain separate property, including those purchased during the marriage. However, they want to ensure that if either party contributes to the real estate financially, they will be reimbursed. One day down the road, Alice purchases a house. It’s technically her separate property, according to their prenup. However, John contributes $30,000 of his separate property funds towards the home for renovations. According to their prenup, if they ever divorce, John will be reimbursed for his contributions, but Alice will retain the rest of the value of the home.
The bottom line on buying a house
Diving into the adventure of buying your first home together as newlyweds is a big deal! Make sure to chat about what matters most to each of you, like location and budget. Don’t forget to lean on experts like real estate agents and mortgage pros—they’re there to help you figure out the nitty-gritty stuff. So, keep the communication flowing, stay realistic with your expectations, and get ready to put down some roots in a place you both love. Happy house hunting, and here’s to many cozy nights in your new abode!
Kellie Krull is a full-time REALTOR® based in Atlanta, GA and a native Georgian with deep roots in the community. With a unique blend of real estate expertise and interior design insight, she empowers homebuyers to make strategic, value-driven decisions. Kellie’s extensive network across the country ensures her clients receive top-tier guidance and connections, no matter where they’re looking to buy.
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