The glorious month that brings us awards shows, the Super Bowl, National Pizza Day, and Presidents Day. February also brings about another holiday that has the power to radically change futures. That day, of course, is Valentine’s Day! According to WeddingWire.com, 10% of people will get engaged to their future spouse on February 14th. If you are part of that 10% and plan on buying a home with your sweetheart; I have some good and not-so-good news.
THE GOOD: 2020 is a WONDERFUL year to purchase a home and start your new life together! Interest rates are still incredibly low, around 3.625% for a 30-year loan, according to Brandy Dawson at Inland Bank. Plus, there are still plenty of grants available for first time home buyers through IDHA, the Illinois Housing Development Authority. Some IDHA grants offer up to $6,000 in down payment assistance! Many of today’s first-time homebuyers are unaware that most mortgages DO NOT require the traditional 20% down payment to purchase. FHA mortgages, which are insured by the Federal Housing Administration, offer relaxed qualifications with down payments as low as 3.5% for buyers with a credit score of over 580.
THE NOT-SO-GOOD: Hopefully, you’ve had some serious conversations with your fiancée about your future together…aside from what you will name your pets. I’m referring to discussions about where you will live, starting a family, and who has debt? The dreaded debt question looms large! If you don’t know the answer before starting your home search, you’ll learn the nitty-gritty of your fiancée’s financial health when applying for a pre-qualification letter from a mortgage lender. That may not be the time to spill the beans about the summer you quit your job to follow your favorite band across the country, accumulating a mountain of credit card debt. Shoot! Was that just me?
If one partner is unable to be included on the mortgage due to credit card debt, a low credit score, or taking an “extended vacation”, DO NOT FRET! If your fiancée’s finances won’t be considered when determining your home-buying power, you can sometimes still include your sweetheart on the title (deed) of the home you purchase. HOWEVER! You will want to have another tough conversation regarding what will happen if things do not work out with only one of you taking all the financial risk. Even if marriage isn’t in the cards, but you want to purchase together, consider speaking with a lawyer. You’ll want an agreement explaining how much interest each party has in the home, or how much each has contributed to the purchase, just to be safe.
MORE GOOD NEWS! Once the financial questions are out of the way, you’ve received a pre-qualification letter from a lender, and you’ve picked your favorite Realtor® from New World Realty’s growing roster; it’s time to go look at houses! The BEST part of actually looking at homes in person is envisioning your new life with your future spouse…. ah, the memories.
Things to keep to mind while house hunting with the love of your life: if they love that green shag carpet…or they think the living room with zero electrical outlets is perfect for a media room… or that the large finished basement will be the ideal place for their dream 30-foot x 30-foot small scale electric train track town… remember how much you love them. Think of all the beautiful memories you will have together regardless of what color the carpet is or how much that vintage train track will cost. This home will be where you share your first good and not-so-good memories of married life.
So, enjoy the process and