1. Make a budget together and discuss your finances
Seems like simple advice but doing things together really is the key to many things in life, not just buying a home. When two people discuss their finances, debts and expenses openly and honestly, it is easier to create a “real” budget. Most likely, you both have been running your own finances separately so taking the plunge to commit to debt like a mortgage is a serious discussion. Be sure both of you understand all the costs associated with owning a home – the down payment, mortgage payments, property taxes, possible condo fees, home insurance, repairs, property maintenance, etc. It’s not just the mortgage payment that counts.
2. Credit habits and the mortgage application
Your lender will most likely be looking at the credit habits of the higher earner and it is their credit score that will most likely be used to determine the risk level of your mortgage application, as well as interest rate options. The co-borrower’s credit can strengthen the overall application as well. Your lender can provide all of this information – do not be afraid to ask questions and don’t worry if you feel like you’re asking “dumb” questions. It’s also a good idea to grab the lender’s business card so that you can email any questions that come up after hours. Sometimes this is the best time to reflect on the meeting you had with the lender, review the information and gather your thoughts. If you do need a co-signer to qualify for a mortgage, please speak with a real estate lawyer to understand all of the legal implications.
3. Future goals and priorities
If you’re a couple and are intending to buy a home together, most likely you’ve already discussed your future, and probably at length. But have you discussed the unpredictability of life – job loss or job changes, maternity/paternity leave, etc. This can cause major stress in a relationship, especially if financial difficulty becomes a factor. Be open and honest with your vision of a future together.
4. The type of home you want to buy
With so many options out there it’s best to keep a good grasp on what the both of you are looking for. Together, discuss your needs and wants: most important rooms in the home, number of ideal bedrooms, whether the basement needs to be finished, the type of neighbourhood you are looking for, etc. Do you want a newer or older home? This input will help your real estate professional hone in on the right home for you, plus, keep you within your budget!
Jennifer Birch – Realtor