Newlyweds are typically full of bliss after finding that life partner.  It can be a wonderful time to mesh two lives into one.  The most important piece of advice for a newlywed couple is to communicate on important decisions such as real estate purchases.

 

A home purchase can symbolize a marriage unity and takes planning to succeed.  These steps to homeownership can minimized the stress associated with a time sensitive decision. Consider this list of recommended steps for newlyweds.

 

Blend finances and make a budget

 

It is said that two can live cheaper than one.  Gather your financial information and put the numbers together.  Compare the combination of pretax dollars to the amount of debt that you owe monthly.  Ask yourselves realistically what can we afford? The total amount of income to debt ratio should not exceed 36 %.  In addition to this ratio, it is recommended to have a 3 to 6 month living expense emergency fund saved.

 

There are other considerations in the house purchase decision. What type of loan would be best for the financial condition of the newlywed couple? Consider savings amounts and how much money could be put down on a home loan.  A larger down payment could bring down both payments and the time terms of a loan. Decisions must be made on how much to keep in an emergency savings for items such as job losses, job transfers and medical emergencies. Also do not forget to include additional expenses needed for mortgage closing costs and items needed in the new home.

 

 

Check your credit and obtain a preapproval

 

Check your credit report to avoid discrepancies that may need clearing up.  A clean credit report is imperative to the home purchase process.  Credit scores affect the interest rates, approval and amount of a loan available to the borrowers.  Do everything possible to improve your score.  This may involve waiting for a time to pay down debts.  However, this can save you money in the long run.

 

As soon as possible, obtain a preapproval letter from the lender of choice.  There will be an application and credit check required for this preapproval.  It is recommended that a couple research at least three mortgage companies for rates, terms and reputation of the lender. A preapproval letter is good for 60-90 days before requiring a re-approval.  Interest rates can be locked in during this period.  That is why this step should come after budgeting and credit checks.

 

Prioritize your list of home choices

 

With a financial plan and a mortgage preapproval, it is time to prioritize your list of home choices.  With your budgeted amount in hand, the price range for your home is already figured into the plan.

 

Whether your choice is a condo or a home, you can now start the process of viewing homes, floor plans and neighborhoods that are of interest. Young couples who plan to have a family may need to consider the school districts as well as distance to work.  Everyone should prioritize their wants from their needs in terms of commuting distance, distance to shopping centers and access to areas for your hobbies such as lakes and parks.

 

Now that the newlywed couple has a financial plan, preapproval letter and priorities, the foundation is laid to start the home purchasing process.