While it may seem like just another debt on top of your wedding, buying a home may be the best option for newly wed couples. Consider the price of rent in your area. Why pay someone else’s mortgage when you can pay for your own each month? Not sure where to begin? First make sure that you and your spouse can come up with 10% of the home’s cost. That’s right, if you’re like most new couples (or any couple for that matter!) you don’t have a spare $200,000 lying around. Sure 10% may sound like a lot to you and your spouse, but it’s an investment for your future. For newly weds that can not afford 10% of the actual price of a home, 5% arrangements are made with many financial institutions.
Applying for a mortgage is actually quite simple. All you need to do is go to a mortgage broker or bank lender and discuss you and your partner’s financial needs. Make sure that you and your spouse (both) have full-time positions that provide a steady source of income. Lenders will meet with you both privately to examine your credit histories in order to make a decision for your home loan approval.
Unfortunately, many newly weds get in over there heads when they buy their “dream home.” This is troubling because our eyes can often become much bigger than our wallets. Remember, it isn’t a dream home if its mortgage payments take you down to your last penny every month. Discuss these matters with your lender. Tell them that you want an affordable mortgage. It’s quite helpful if they factor your insurance and property taxes into your mortgage calculations. And of course, the other expense: lawyer fees. Don’t forget about closing costs. If this all seems foreign to you and your spouse/spouse-to-be, don’t be afraid to ask your lender questions.
At first certain terminologies may seem confusing. Terms like “equity” can seem mind-boggling to any couple who has decided to purchase a house. It’s not rocket science, it just takes some time and practice to learn these terms. Let’s go over some common terms of which your home loans payment is made up of:
- Principal – This is the total sum of money that you and your spouse will borrow from a lending institution (after you’ve made your down payment, of course).
- Interest – This is the money that your lender charges your family for the home loan. It is a percentage of the total amount of money.
- Equity – The portion of your home that you’ve already paid for (on a monthly or bi-weekly basis).
We know, it seems overwhelming. Suddenly you get married, and you’re forced to make all these grand decisions. If you’ve asked yourself: “Will my spouse and I have to pay for this house for the rest of our lives?”– the answer is no. There are many different ways you can pay off your home loans. Mortgages are available upon different basis’. You can take a loan for ten years, twenty years, and thirty years (at most). Speak to your lender to find out which time-frame will suit your family best.