A few decades ago, it was almost expected that newlyweds bought a house together. There was no question about it! While planning the wedding, the couple would also be searching for their first home together as a married couple.
Nowadays, newlyweds are faced with the decision of whether to buy or rent their first home together. As the real estate market skyrockets and housing starts to reach the price of unaffordable, newlyweds are struggling to make their decision.
There are quite a few factors to consider when deciding whether to rent or buy a home. As you ponder your options, take these questions into account.
How is Our Credit Score?
It’s essential that you and your spouse be open and honest about your financial situation, especially any debt you’re in and the state of your credit score. Your credit score actually has a lot of influence on whether or not you should buy a home.
The higher your credit score is, the more likely you’ll be approved for a loan and receive a low-interest rate on the mortgage. For reference, your credit score should be around 750 to start the process of buying a home if you want to have the best chance of receiving a good rate.
Do You Have a Down Payment?
The down payment is the most expensive part of purchasing a home, especially if it’s your first home. While each mortgage may require a different down payment, newlyweds should have somewhere between 5% and 20% saved for their down payment on their home.
Sometimes first-time home buyers can put as little as 3% down due to certain mortgage options such as the FHA loan. However, it’s recommended that you put down as much as you can at once so you can save on interest and avoid paying mortgage insurance each month.
Can You Afford Repairs and Other Costs?
Buying a home is much more than simply paying the mortgage and utilities. You will run into unexpected repairs that can be quite costly. For example, if your home needs a roof repair or replacement, which can be handled by companies like Alpha Elite, you can expect to pay around $20,000 for a quality repair or replacement.
Property tax, homeowners insurance premiums, and other maintenance costs should also be factored into a newlywed’s budget when considering whether or not they should buy their first home.
As a renter, the landlord is responsible for making and paying for repairs. So, when the property needs a new roof, it isn’t the newlywed’s responsibility.
Where Do You See Yourself in Five Years?
It’s the age-old question that most people don’t really like. But before buying a home as newlyweds, it’s important to determine where you two see yourselves in the next five years. If you see yourself living in the same area working the same jobs, then you may want to consider buying a home.
However, if you aren’t sure where you will be and want the freedom to go wherever life takes you, you’re probably better off renting. Renting a home gives you more flexibility and less commitment to where you live.