Buying a home is a major financial milestone and its significance grows when you do it with a partner. Blending the pursuit of property ownership with another person requires mental clarity, patience, and flexibility.
Sometimes, the stress of home buying can put pressure on your relationship. Take these three steps and gain clarity on your shared goals to ensure the journey toward homeownership is smooth.
1. Determine Your Home Buying Budget and Borrowing Options
Budgeting is a part of life and when it comes to home buying, it’s the first step to take. When pursuing homeownership, the pre-qualification and lending process may seem foreign compared to most daily transactions. However, it’s a process that can be broken down and simplified with a small investment in time.
Sit down with your partner and first discuss your current budget, including your housing expenses. If you live together already or share finances, this may be a typical conversation. However, if this is your first time sharing financial information, it may initially feel uncomfortable. Sharing financial details requires a lot of trust.
Treat this discussion as a formal business meeting and agree to come prepared with up-to-date figures. Gather paystubs, bank statements, credit card statements, car and student loan balances, and any other financial documentation.
Download these items into a cloud-based folder in a shared location for centralization. This also helps you get a step ahead since you’ll be gathering the documents you’ll need for income verification and mortgage pre-approval.
Discuss your comfort with your current home and home-related expenses, like utilities and maintenance. If you’re blending homes, you may find efficiencies or opportunities to save.
Get real with your perspective on borrowing money, as a mortgage is typically the largest loan you’ll take on. Share how much money you have for a down payment and what savings strategy can prepare your finances for homeownership.
2. Share Your Home Search Wishlist
Now that you’ve gone over the financial discussion hurdle, it’s time to get to the fun part — your wishlist. Step away from the more serious financial side and let loose with your hopes and dreams for your home. Grab a pad of paper and a pen, and kick off a brainstorm when you’re both in the right mindset.
Think about things you like about your current living situations and areas of contention. If your rental has a major storage problem, add “abundant closets” or “attic space” to your must-have list.
Cover major features like a home’s location and surroundings. If you both work remotely, the town you live in may be up for discussion. Discuss proximity to entertainment, amenities, and family and friends, as those factors largely influence how you live day-to-day.
Fine-tune your list and prioritize home-specific features, identifying which can and cannot be modified. You may have flexibility on cosmetic features, but if you’re busy or uninterested in home improvement, you may prefer to buy a home already suited to you. Let your conversation flow into the details, and pay attention to how you both react to discussion points.
Take note of hard lines and those that are more flexible to inform your search query. In the end, you should be able to identify a refined list of what you want that you can both agree on. Keep this must-have list handy as you consider individual properties to ensure you’re holding to your goals or changing thoughtfully.
3. Discuss Your Expected Timeline of Ownership
Employment churn is very real, and it should be a part of your homeownership discussion with your partner. The median time of employment Americans typically stay with one employer is 4.1 years as of Jan. 2022. If either you or your partner tend to change jobs regularly, this component is especially important.
Job changes can mean new opportunities, more money, and exciting benefits. However, they can also require housing changes, like relocation or home upgrades. Discuss if your line of work could come with relocation benefits, which would soften the financial blow of moving. If not, determine if the risk is worth it, as moving before you’ve built equity can be detrimental.
Use a mortgage calculator or work with your lender to review potential loan amortization calculators. This can help you see where your loan balance might be if you need to move shortly after buying. Similarly, consider how long your potential home might suit your needs, especially if you anticipate your needs changing.
Calculate the benefits of buying a home to grow into versus one that’s a stepping stone. Review current mortgage rates and learn about how they’re projected to change.
While no one can predict the future, work with your lender to understand the trends so you make an informed decision. Assess how area homes have appreciated to determine if your potential home is expected to increase in value. If it is, your home may be a wealth-building tool and a place to build your life.
Blend Business and Pleasure Without the Stress
Taking on a mortgage with your partner blends your relationship with your financial life like few other transactions can. Make the process simple by being honest about your goals and comfort with financial commitments and property ownership responsibilities.
Speak up early and often about your concerns, being candid and transparent so your search fairly reflects both your outlooks. Choose a home that suits you as a couple and the future you’re working toward, without the stress.