These days, there can be something incredibly intoxicating about looking at real estate with your partner. After all, it provides a break from the mountain of everyday concerns people have right now, and it provides fodder for dreams. But, before people are swept away by the romance of it all, there are a few key practical concerns that need to be addressed before signing your life away.
Ask the Uncomfortable Questions Right off the Bat
Especially if you are not married, you will need to decide what happens to your real estate if you decide to end your relationship. Whether you choose to do joint tenancy or tenancy in common, you will want to consult with lawyers and tax professionals who understand the intricacies of purchasing a property. If you want to ensure that you are really protected, consult experts on an individual basis and not as a couple. The sooner you get this issue out of the way, the better you will feel.
Location, Location, Location
If the last few years have taught us anything, it is that there sometimes is no way to prepare for the curveballs that life sends our way. However, it is good to design a general framework of where you want to be within the next five to 10 years. Do you see yourself living at this property for a long time? Would you be interested in raising children in the area? If so, you may want to check out the local school system before signing the papers. Developing a loose timeframe can help you to make decisions that are in your family’s best interest.
What Kind of a House Can We Afford?
Of course, finances can be a touchy issue when it comes to relationships. Whether there’s a disparity in income between you and your partner or one partner boasts a much better credit score, there can be many factors involved in finding financing for your prospective new home. Consider how much you could collect for a down payment. The traditional advice is to have 20% of the home’s full price ready to go when you sign the papers. Of course, in areas such as Los Angeles, this may be easier said than done. But, even if it seems like you may not have enough cash, you’ll definitely want to explore all of your options. The Federal Housing Administration offers some attractive options, and veterans may find themselves eligible for more financing through Veterans Affairs. Again, it helps to speak with an expert when pondering how much you may be able to pay for a mortgage.
Learn about DTI
Your DTI is your debt-to-income ratio. For lenders, the DTI speaks volumes about whether or not you will be able to repay their potential loans. If you or your partner maintain high credit card balances, for instance, now may be the time to get those in order. With the right kind of planning and communication, you and your partner will master the home-buying game.