Relationship experts have vivid opinion about the concept of “Mortgage before marriage”. But despite of other financial hardships, many un-married couples are getting attracted to the idea of purchasing their dream home way before doing any market research. It is necessary to judge the current mortgage market & also their capability to carry out the mortgage. It is advised by many financial experts that before taking the sacred oath of marriage, couples should develop a future financial strategy. It would help them to make a proportionate division between income & mortgage payment. They can also make the decision regarding the property division if they get separated in future.
Here are some simple steps you need to consider before buying a new home prior to your marriage:
Set a payment bar - At the time of real-estate boom, lender had given the elasticity of borrowing up to 60% of your individual income. After implementing the recent hard lending rules, it became as less as 30 to 35% of your gross monthly income. But taking the opportunity beyond your capability is not wise. If you are borrowing more than you pay, it would gradually become impossible for you to bear the burden. So, it is advisable that you set a bar on your lending capability & borrow maximum 1/3 of your income only. It will help you to maintain the balance between income & expenditure along with a healthy relationship with your spouse.
Equality between the couples - It is your duty that both of you (couples) must choose the proper home. Both of you should have equal importance regarding property selection, notably before marriage. If you or your partner dominates the home buying process, it is clearly seen that your relationship might be more prone to a breakup. If you ignore your partner's preferences, sooner or later, it will backfire as resentment will develop gradually. It is recommended that both of you should chalk out the entire buying process by giving the equal importance to both of your choices.
Discuss payment share & financial issues – Usually, couples don't like to talk about money. This is because they think that discussing about finance is a bit unromantic. But for a healthy relationship, it is required to communicate with your partner regarding different costs associated with home-buying. It is good to have a chat before purchasing the house. It will help you understand each other's financial burden which might be a deciding factor regarding how much you are contributing toward home purchase. It is wise to proportion the contribution as per the income range. Not only mortgage, but you should also separate the duties of paying other essential costs like utility bills, repairing costs etc.
Appoint a mediator – Many couples appoint a mediator for consulting if they are facing any difficulties in relationship. It is not that a mediator can only help you regarding your divorce, but also they can help you to find a reasonable conclusion about problems you are dealing with. Making an important decision like home buying may also require a mediator to perform an un-biased judgement. It is acceptable to discuss your financial conflicts to a third- party who can skillfully help you to take the right step.
What if you want to marry first & then go for a mortgage?
It is shown in a report of “FamilyFacts” that, from 1991 to 1996, 31% of the married couples applied for a mortgage which is comparatively higher than the unmarried people. Married couples are proved dedicated homeowners seven times more than single couples. The number of people divorced were 28% less than the unmarried guys who were interested for a mortgage.