When Should Newly Weds Buy Their First Home?

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When you’ve just been married or you’re planning to get married, it’s natural to think about buying a home. After all, real estate is a good investment. With a home you can build your wealth more securely for the future.

Before you check out homes and condos for sale, you ought to make sure that it’s the right time for you to buy. It’s not enough that something feels right for you. Just because you’re ready to commit to a marriage doesn’t mean that you’re financially secure enough to buy a house.

So how do you know if it’s the right time? Here are 5 signs that indicate you’re ready to make this major financial commitment:

  1. You have a great credit score. Your credit scoreis affected by how often you pay your credit card bills and balances on time. A good credit score can get you the best mortgage rates because your credit score is an approximation of how likely it is for you to pay your debts. You know you have a good credit score if it’s 750 or  higher. If your credit score isn’t that high yet, then you can take the time to improve it.
  2. You’re totally free of debt.This means you’ve paid off your car and your student loans are paid off as well-this may be a bit too difficult for you even though it’s an ideal standard. At the very least, you should pay off all your unsecured consumer debt. These include your credit card balances as well as medical bills and utilities. You’re taking a mortgage and that’s a huge loan that puts you hundreds of thousands of dollars in debt so you need to clear other debts first.
  3. You have enough money to apply as down payment.It’s best for you to have enough to cover at least 20% of the price of the home in order to get the mortgage you want. You should also make sure that you have the money for the closing costs. You need to keep in mind that the higher down payment you can make, the lower your payments will be for your mortgage. If you have less than 20%, you may even have to pay for mortgage insurance.
  4. Aside from the down payment money, you also have an emergency fund for at least 3 months.This emergency fund should be able to cover the household expenses for 3 months. Better yet, save enough money to cover 6 months of expenses. This is to help protect you if ever you lose your job so you can still make your mortgage payments as you use the 3 months (or 6 months if you’re lucky) to find a new job.

Remember: you need the down payment money as well as a separate emergency fund.

  1. Your salary is also high enough that your monthly total payments total up to no more than 30% of the salary. You need to think about your mortgage payments, your house insurance, and your taxes for your home. The total of all these must be less than 30% of your salary, though 25% is ideal.

The median household income in the US is $51,939 per year. That’s $4,328.25 a month for you if that’s how much you earn. That leaves you with about $1,300 a month for your mortgage payments, insurance, and property taxes.

Make sure you’re financially secure before you buy your first home, and it’ll be good for your marriage as well!

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