Married couples often have the upper hand when it comes to buying property. Thanks to combined incomes and higher spending power, coupling up can take you one step closer to purchasing your dream home.
However, there are some important differences in the home-buying process for couples and singles. With this in mind, global property portal Lamudi has provided a cheat sheet for newlyweds and other couples looking to enter the real estate market for the first time.
Look at both your finances
If you and your spouse both have a good credit history, your chances of qualifying for a mortgage increase. By pooling your combined income, you will be able to afford a larger down payment and get a better deal on your mortgage. Be honest with your partner about your credit history – from any existing credit card debt to outstanding students loans – so you are well-equipped to approach a financial institution.
Consider going solo
If one partner has a lower credit score, you might need to consider applying for a mortgage without your spouse. The person with the lowest credit score is most likely to come under the microscope during the application process. If it is possible that your partner’s poor credit history will hurt your chances of qualifying for a loan and securing the property you want, you may decide to leave them off the application.
Investigate a partnership agreement
For unmarried couples who are nevertheless looking to purchase a home together, a home buying partnership agreement could be worth your while. This serves as a kind of prenuptial agreement for your home and protects both parties if the relationship does not work out. The legally binding agreement will outline the ownership terms, who pays for expenses such as mortgage repayments and taxes, and how the property will be divided in the event of a break-up.
Track your finances
Once you have qualified for a mortgage, developing a good system for monitoring your combined finances is essential. The first step is to create a shared budget that you will both adhere to. Simple measures like applying for a joint bank account can simplify the process of tracking your finances. You might also consider using a budgeting app to stay organised. Above all, set a regular time to sit down together and review your goals and your financial position, and make sure you stay on track.
Post submitted by lamudi.co.ke Regional Communications Manager Susan Mumbua
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