AS cupid strikes this Valentine’s Day, many loved up couples will be excitedly saying yes to buying a house together. It’s an exciting move and often one of the big stages in many people’s relationships.
However, to ensure the process is as smooth as possible, it’s best to be as informed and prepared as you can, whether you’ve been together for years, or it’s a relatively new relationship. The same goes for whether you’ve already said ‘I do’ or are already co-habiting.
While it’s not be the most romantic Valentine’s Day dinner chat, it’s important to discuss financials and possible challenges you might encounter - the key is to be as open as possible with your partner. Brian Murphy, head of lending at Mortgage Advice Bureau shares five crucial considerations to talk about with or ask your significant other before taking the leap and buying a home together:
1. First things first, what can we realistically afford together?
You’re in love and excited about your future in a new home. But, before beginning your search, or speaking to a mortgage adviser, ensure you are open and honest with each other about how much you can commit towards home ownership. This will make a considerable difference to the kind of home and the area you eventually choose.
2. Honesty is the best policy
While perhaps not as exciting as planning your future together, it’s essential to make sure you discuss your financial history and any red flags there might be. It can be an uncomfortable topic, but it’s better to know than get rejected for a mortgage because of a black mark on one of your credit scores – which you hadn’t discussed. Things that might go against you include if you’ve regularly missed payments on any credit agreements or loans or you’re still paying off credit cards with high interest.
3. Making a decision together
You’ve found the home you want to settle down together in, and you can’t wait to put an offer in. Before doing so, make sure you speak to a mortgage broker to see what mortgage options are available for your situation. And look to get a mortgage in principle. It’s better to know how much your lender will offer you, before making any offer on your dream property.
4. No one wants think about breaking up, but….
It’s the last thing you want to think about, especially as cupid strikes, but it’s worth running through the different financial scenarios if you and your partner ended the relationship. If things go awry, it’s good to know where you’ll stand financially and what could happen to the home if you decide to separate.
5. Signed, sealed, delivered! Agreeing you’ll be on the deed and the mortgage? Will you be joint tenants or tenants in common?
There are two options for your agreement – either joint tenants or tenants in common. If you choose to be joint tenants, you will both own an equal share of the property. If one of you dies, your share is passed to the other tenant, and if you take out a mortgage – it’s a joint one. Alternatively, tenants in common means that you do not have to have equal shares of the property. For instance, if one of you earns more, you could choose to pay more towards the house and have a greater share. Be sure to chat this one through carefully - there are legal points to consider with both choices, and both have pros and cons to weigh up.