Tips For Saying Yes To The House

The Federal Savings Bank knows that some first-time home buyers might not be committing to each other before committing to a mortgage. Forbes noted on July 7th in a release that historically low interest rates may be encouraging individuals to purchase a home instead of an engagement ring. For those deciding to purchase real estate before tying the knot, there are a few things to consider to ensure the transaction goes smoothly and to avoid any hiccups down the road.
The following are tips from The Federal Savings Bank for how to proceed with a mortgage before marriage.
Know both credit scores
Couples looking to invest in a home together should both share their credit reports.
“If a couple is entering into a business deal, which is what a home purchase between two nonmarried people is, they should know the creditworthiness of their business partner. A person’s credit score will impact your ability to obtain a mortgage and the interest rate you will pay,” noted Kevin Reardon, a financial adviser, according to a release from July 1st.
Unmarried couples have an advantage because the individual with the higher score can apply for the mortgage. Typically, married couples are considered one unit. If someone has bad credit, both are impacted.
Have a plan
Set up a joint checking account where both parties can deposit money into to pay for the mortgage, property taxes, maintenance and any insurance.
In addition, the two parties should decide which name goes on the deed and what happens if the two decide to separate. Whatever terms are finally agreed upon, it is important to get it in writing. The law for homeownership between an unmarried couple is much less precise than the law for those who tied the knot then bought a home.
Contact the Federal Savings Bank, a veteran owned bank, to learn more about mortgages.