The playbook of life looks something like this: Go to school. Get a job. Get married. Buy a house. Have kids. How to do each one of these steps is sometimes left out of the playbook. While the time between the school, job and marriage parts might be long, the time between the marriage, house and kids never is. Once you get married, the pressure to buy a house and have kids is inevitable and you are bound to feel overwhelmed. I have provided a few very simple things to think about before buying your first home as a newlywed. Hopefully, these tips ease the fear you may have of this phase of your life.  When you are thinking about these, remember that you are now thinking in “we” terms, not “I” ones.  You both have to feel comfortable with your new home and the lifestyle changes that come with it.

  • Have a solid credit score; 750 or higher should get you the best mortgage rates.  Alternatively, have no credit score because you don’t borrow money and get a manually underwritten mortgage.
  • Have at least 5-10% of the purchase price to apply as a down payment (in addition to closing costs).
  • Ideally, become totally debt-free, but at a minimum you should pay off all unsecured consumer debt.
  • Have an emergency fund of 3-6 months of household expenses saved up.
  • Only take on a mortgage where your total payment (including taxes and insurance) will be no more than 25- 30% of your monthly take-home pay based on a 15-year fixed-rate mortgage.
  • Will our careers keep us in this general area?
  • Are we each comfortable with the daily commute that will be required?
  • Is this neighborhood up-and-coming and do other young couples live here?
  • Given we’ll be here for a while (and maybe you have children already), is this the school district we want to send our children?
  • Are we an appropriate distance from our mothers-in-law!?!

For the past few year, all people were talking about was how it was a buyers market in real estate. Low prices, great deals and low interest rates were popular news headlines. If you were in the market for a new home, everyone’s advice to you was buy, buy buy. Lately, however, the idea of building your new home has slowly been making a comeback. The headlines from just this past week have all been about the rise of confidence for home builders. So, which is better: buying or building? Check out this Pros and Cons list from newhomeguide.com.

Home building pros:

·       Control: Building a home lets you have control over all the features and options that will affect you on a daily basis.

·       Knowledge: As you monitor the construction process, you’ll learn useful things about home construction and gain a sense of ownership that can only come from watching your house take shape step by step.

·       Expert advice:  You’ll have the expertise of the builder, contractors, and an architect to guide you.  Have peace of mind knowing that the pros are thinking about code, permits, and energy efficiency — not you.

·       The eco-friendly edge:  You have the option of using environmentally sound materials and energy-saving features that will both make your conscience feel good and keep more cash in your wallet over the years.

Home building cons:

Cost overruns:  You could have to pay extra for unexpected expenses.  Unexpected costs can occur in any home construction project.

Time: Waiting for construction to finish can be disheartening, not to mention that having to come up with alternate living arrangements while you wait can be costly.

Stress:  Every time a decision has to be made or a problem arises, you’ll hear about it.  Dealing with those considerations on a daily basis throughout the home building process can take their toll unless you’ve got a positive mental attitude.

Buying a new home
Buying a new home involves scouring real estate listings with an agent to find a home that suits your needs.  The process can take a few days or a few months, depending on how fast you want to move.

Home buying pros:

·       Shopping around:  You get to be a critical shopper, comparing different features until you find exactly the right combination at the right price.

·       Bargaining:  You can drive a tough bargain and get the best deal possible, knowing that, in a competitive market, there are other options waiting for you right up the road.

·       Taking your time: When buying a new home, you get to work at your own pace.  You can take your time house hunting.  And when it comes to moving in, you work with the seller to choose a date that’s soon or a few months away.

Home buying cons:

·       Concessions: When buying a home, may have to make concessions in regards to features you want.  You may not find the “perfect” house since you didn’t design it yourself.  And you may need to spend money making updates or repairs.

·       Stress:  Finding and making an offer on a new home can be stressful, especially if you are in a seller’s market.  You may need to act fast or make an offer that’s more than the listing price if you get stuck in a bidding war.

Maintain, maintain, maintain the status quo! This is the best advice anyone could give a potential home buyer. No matter what type of credit you have, there are things you can do to make lenders think twice. Here are 12 things you should NOT do if you are trying to get a home loan.

  1. Don’t change your job.
  2. Don’t change banks.
  3. Don’t buy a car or truck or any other form of transportation that you have to finance. This will increase your debt-to-income ratio. Typically this ratio should be at or below 12% before buying a home. Once you buy a home, that ratio will skyrocket but shouldn’t be higher than 43% of your income. Check yours here.
  4. Don’t buy furniture on credit before buying your house.
  5. Don’t make large deposits into your bank accounts. Lenders like the money that will be your down payment to be sitting in your account for at least two months.
  6. Don’t co-sign a loan for anyone.
  7. Don’t shift money between accounts.
  8. Don’t give deposits to a seller. The deposit should always go into a trust account because sometimes, if sellers have access to this money, they might even start spending it before the deal is closed.
  9. Don’t buy the house alone. It is always best to hire an agent to do the job for you.
  10. Don’t attempt to consolidate bills before speaking with your lender. The lender can advise you if this needs to be done.
  11. Don’t pack information that may be needed for the loan application.  Important paperwork such as W-2 forms, bank statements and tax returns should not be packed with your household goods. Duplicate copies could take weeks to obtain and could stall the closing date on your transaction.
  12. Don’t run a credit report on yourself or let anyone else for that matter!  This will show as an inquiry on your lender’s credit report. Inquires can lower your credit score a little bit and they must be explained in writing.