Stephanie Jones, REALTOR's Blog
Once you move in with a partner, you know you have reached an important milestone in your relationship. For the first time, you could be talking about money with your partner. Whether you’re moving into an apartment or buying a home together, it’s important to break down how you’ll merge your finances together.
While it’s one of the least romantic conversations that you’ll probably have as a couple, sharing your financial situation is one of the most vital. Below you’ll find some tips on starting that conversation and making it a smooth one.
In any relationship, honesty and communication are key. This is especially true when it comes to finances. There’s a lot that goes into your own financial picture, and it’s important that you share that with your partner. This is important for everything that will happen in the future including purchasing a home. Some things that your partner should know:
- How much loan debt you have
- A rough idea of your credit score and history
- Your income
- Your spending habits
- Your saving habits
It’s important to know how another person’s habits will affect you as a whole when you’re thinking of making an investment together like a piece of property. Everyone handles money differently, and you should know how someone’s spending habits meshes with yours. Do they live paycheck to paycheck? Do they save money regularly? Are they financially strained? All of these questions help you to understand where you are similar and where you are different when it comes to money.
Have A Plan For How You’ll Divide Expenses
It may seem like a 50/50 split on expenses makes the most sense. For many couples it does. In other situations, if one person makes more money, they may need to pay a bit more of the costs. Some couples have one person pay the rent while the other takes the utilities on as an expense. Take amounts and percentages that you feel comfortable with and do what wrks best for the both of you.
Remember that chores count too when it comes to dividing up the “expenses.” This is just an extra tip that will help you to build a stronger relationship in the long term and help to save arguments.
Use A Joint Account For Expenses
You should still keep your own bank accounts when you move in with a significant other. All of your money shouldn’t be funneled into one singular account. Create a separate bank account for your expenses like rent or mortgage and utilities. All of your personal expenses should come out of your own respective accounts.
No matter how much you feel that you can trust a person, it’s always good to put everything in writing. This way, if there are any disputes in the future, you’ll always have a contract that you can refer back to. It’s also important to have these documents for things like security deposits or down payments. If the relationship ends at any point, it’s important for the person who paid for certain things to get their money back.
Planning and tracking your finances when you move in with a significant other is important. It will certainly make your life easier if you have these conversations beforehand.
Buying your first home is a big endeavor, both financially and personally. Homeownership means taking on new responsibilities and bills, but it also means true financial independence.
If you’re hoping to buy a home in the near future, you might be wondering what you should be doing now to put yourself in the best position when it comes time to buy a home. Well, you’re in luck. Today’s post is a simplified list of all of the things you can be doing today to start making your way toward your ultimate goal of homeownership.
1. Pay off small debts
The first thing you’ll want to do to start saving for a down payment is to make sure you’re not pouring money down the drain to credit card companies for interest rates. If you owe small amounts of money (or less than $1,000), now is the time to aggressively pay down those debts.
The goal here is to get your credit cards to a place where you pay off your balance in full each month, avoiding interest while still earning rewards and building credit.
2. Speaking of credit…
One of the most important aspects of buying a home is your credit score. Take the time to learn about the 5 main things that contribute to your credit score and then work on ways to improve your score in those areas.
3. Don’t open any new accounts if you can help it
Once you start getting closer to applying for a mortgage, you won’t want any new inquiries on your account that are temporarily lowering your score. If you need to open a new account to lift your score, then do so well in advance of applying for a mortgage.
4. Get serious about saving for a down payment
There are a few ways to proactively save for your down payment; none of them include setting money aside when you feel like it. Start by opening a dedicated account and direct-depositing a portion of your pay into that account each week.
If you have an emergency fund in place, you might be in a position to use a CD or certificate of deposit. These give the highest earnings from interest out of any form of savings. The catch? You can’t withdraw from the account until you reach your savings goal without a penalty. If you know you won’t need to dip into these funds before they’ve matured, a CD is an excellent way to save.
5. Find out how much house you can afford
Homes are expensive. but, if it’s your first home, you might need to borrow the maximum amount form the bank to find a house that you’ll love. To find out what is a reasonable amount to spend on a home, you’ll need to consider your monthly mortgage, bills, taxes, insurance, and any other expenses. Leave yourself room for savings, emergencies, and to live a little. You won’t be able to enjoy your home much if you have to spend your days struggling to afford it.
6. Career planning is vital
A good career is a balance between stability and upward mobility. Don’t be afraid to be on the lookout for new positions with higher pay and better opportunities, even if you’re happy with your current job.
If you’ve been in your position for a while, consider asking for a raise. Research salaries for other people in your position and go to your boss equipped with data to show that show you deserve a raise.
Purchasing a second home should be a fun, exciting experience. Yet homebuyers who fail to consider where they want to pursue a second residence may struggle to achieve their desired results.
If you know you want to buy a second home, it often helps to narrow your house search to residences in a select group of cities and towns. Then, you can evaluate available residences in your preferred cities and towns and boost the likelihood of finding a house that you can enjoy for years to come.
Of course, determining which cities and towns where you want to pursue a second house can be difficult. Yet there are lots of things you can do to hone your house search, including:
1. Evaluate Your Homebuying Budget
Your finances likely will play a major role in your ability to pursue and acquire a second residence. As such, you should examine your finances closely so you can establish a homebuying budget.
If you have paid the mortgage on your current house, focus on the mortgage costs associated with a second home. For example, if you want to find out how much you can afford to pay for a second home, you can meet with bank and credit union mortgage specialists. This will allow you to get pre-approved for a mortgage so you can enter the real estate market with a budget in hand.
Comparatively, if you still have a mortgage on your present house, you should consult with your lender. This will allow you to determine if you qualify for a second mortgage. Also, you can get financial guidance so you can figure out where to search for a second house that falls in line with your finances.
2. Establish a Homebuying Timeline
Think about when you want to acquire a second residence. Next, you can create a homebuying timeline to help you achieve your desired homebuying goal.
A homebuying timeline should remain flexible. If you want to purchase a second home in the mountains, for example, you should account for the time it may take to transport various personal belongings to this residence. And if problems arise that delay your efforts to acquire a second home, you should be ready to adjust your homebuying timeline as needed.
3. Hire a Real Estate Agent
Let's face it – buying a second home is rarely simple, regardless of your property buying expertise. But if you hire a real estate agent, you can receive extensive assistance as you search for a second residence.
A real estate agent understands the ins and outs of the housing market. He or she will share real estate market insights with you, along with providing tips and recommendations. As a result, a real estate agent will help you find a second home in your preferred city or town as quickly as possible.
Take the guesswork out of finding and buying a second home in the city or town of your choice – use the aforementioned tips, and you could streamline your quest to acquire a second residence that matches your expectations.
A home showing will help you gain the insights you need to make an informed decision about a house purchase. At the same time, you may have many concerns about whether a residence is right for you, even after you complete a home showing.
Ultimately, there are many questions to consider after you finish a house showing to ensure you can make the right choice about a residence, and these include:
1. How did I feel as I walked through a home?
Oftentimes, homebuyers try to envision what life may be like if they purchase a residence. As these buyers walk through a house during a showing, it sometimes can be simple to imagine the possibilities if you buy this residence. On the other hand, it may be tough to envision a future in a particular home if a house fails to match or exceed your expectations.
Think about how you felt as you explored each room in a house during a showing. If you left a home showing with a good feeling about a residence, it may be beneficial to submit an offer or set up a follow-up showing. Conversely, if a home showing left you feeling uncomfortable with a residence, you may want to continue your search for your dream house.
2. Are there any major issues with a home?
Generally, it is a good idea to ask lots of questions about a house during a showing. This will enable you to learn about the condition of a home and determine whether major repairs are necessary.
A home in need of significant upgrades offers opportunities for homebuyers who are looking for a "fixer-upper" house. In fact, if you submit an offer on a fixer-upper home, you may be able to perform assorted repairs to enhance a house's condition and value.
Comparatively, if you are unwilling to perform substantial home upgrades, there is no need to worry. You can always forego submitting an offer on a house after a showing, and by doing so, continue your pursuit for your ideal home.
3. Is a home a viable long-term investment?
As a homebuyer, it is important to find a house that will serve you well both now and in the future. Because if you fail to do so, you risk purchasing a house that will only decline in value in the years to come.
If you feel that a home is a viable long-term investment following a showing, you may want to submit an offer to acquire this residence. Then, if a seller accepts your offer, you can conduct a home inspection and move forward in the homebuying process.
Lastly, as you consider what to do after a home showing, you may want to collaborate with a real estate agent. This housing market professional can help you evaluate the pros and cons of submitting an offer on a particular residence. Perhaps best of all, a real estate agent will offer expert tips to ensure you can find your dream residence in no time at all.
The homebuying journey may require many weeks or months to complete. As you approach the finish line of this journey, there are lots of things you can do to ensure a seamless conclusion.
Now, let's take a look at three tips to help you quickly finalize a home purchase.
1. Conduct a Home Inspection
A home inspection generally is performed after a seller approves your offer to purchase his or her residence. At this time, a home inspector will walk through a house and identify any underlying problems. Next, a home inspector will provide you with a report that details his or her findings.
For homebuyers, it is important to review a home inspection report closely. If a home inspector identifies major problems with a residence, you may want to modify your initial offer to purchase or rescind your homebuying proposal.
You also should attend a home inspection. Although you are not required to attend an inspection, doing so may enable you to gain insights into a home that are not included in a house inspector's report. Then, you can use all of the insights at your disposal to determine whether to proceed with a home purchase.
2. Maintain Flexibility
You may want to close on a home by a specific date, yet the homebuying process offers no guarantees. Delays may happen without notice, and you need to be able to adjust your homebuying timeline accordingly. As such, you should maintain flexibility as you try to finalize your transaction.
Remember, both you and a home seller share a common goal – to complete a property transaction as quickly as possible. If you maintain open lines of communication with a seller, you can reduce the risk of miscommunications that otherwise could slow down the homebuying journey.
3. Collaborate with a Real Estate Agent
Navigating the homebuying journey is rarely simple, particularly for individuals who want to acquire a terrific house at a budget-friendly price. Thankfully, you can collaborate with a real estate agent to achieve the best-possible results throughout the homebuying cycle.
A real estate agent will learn about you and your homebuying goals and do everything possible to make your homeownership dream come true. He or she is happy to provide recommendations and suggestions as you conduct a home search. And when you find your dream residence, a real estate agent can help you put together a competitive offer to purchase it.
Of course, a real estate agent provides comprehensive assistance during the final stages of the homebuying journey as well. Reaching a home closing date may seem impossible at times, but a real estate agent helps take the guesswork out of finalizing a house purchase. Therefore, he or she will go above and beyond the call of duty to ensure you can reach your home closing date without delay.
Simplify the process of buying a house – use the aforementioned tips, and you can minimize the risk of encountering homebuying hurdles and streamline the homebuying journey.