’Tis the season of giving. For some couples, ’tis also the season of getting engaged to marry!
Whether you plan to elope, have a small intimate wedding, or go all out with a big lavish wedding extravaganza, eventually you will need to figure out your living situation with your new spouse.
If one or both of you already own residential property, it’s a good idea to determine whether you want to stay in one of the properties, rent out any of them, sell them, or refinance. It can get trickier if one spouse already owns a property (or more) with another person.
For those engaged couples who do not own any property now but intend to purchase one together in the near future, here are some things to consider when looking for a home:
1) Do you want to purchase before your marriage or after?
There are tax and legal consequences depending on when you make the purchase. Make sure that you talk to your CPA/Tax Advisor and your attorney to determine how a home purchase may impact the both of you before and after marriage. Such a conversation can take place with an attorney while you are already discussing an estate plan, or while setting up a living trust and/or prenuptial agreement. Also, consider the tax and legal ramifications regarding who may be providing the down payment and how much.
2) Do you both want to be named on the loan and title together?
Many engaged couples think that they both have to be named on the loan and title together. However, that may not always need to be the case. This is when starting a conversation with a lender first is critical before looking at tons of homes with your Realtor. Is it required for loan qualification purposes that you both be on the loan? How much can you truly afford? If you plan to start a family together in the near future, you may want to consider the impact of having one (or both) of your incomes reduced should one of you decide to stay home with your child or children.
3) What are your plans for after you get married?
Do one or both of you intend to go back to school? How settled are you both into your current jobs? If there are some significant changes coming shortly after your wedding that would impact your living situation, you may want to rethink your timing to purchase.
It’s easy and fun to go house shopping together as an engaged couple before these discussions occur. But, once you find a house you both truly love, these topics will likely come to light and take some time to figure out together. By then, you may lose the opportunity to make an offer on that property you both love.
Save yourself some time, energy, and heartache and have these conversations first.