The Royal Wedding is coming! The. Royal. Wedding. Is. Coming! I'm a little embarrassed to admit how excited I am about seeing Prince Harry marry Meghan Markle. I'm a sucker for all the pomp and circumstance. Plus, there is the Princess Diana factor (I watched her wedding and her funeral). Fingers crossed that Fergie's daughters will once again don outrageous hats and that little Princess Charlotte will wave at the crowd. Ahhh, Royals....
In addition to all the gazillion other perks of being a member of the Royal family, when you get married the Queen gives you an estate. Of course, Harry and Meghan already have Nottingham Cottage on the grounds of Kensington Palace in London. Not bad, heh?
But folks, here's some shocking news: The majority of newlyweds are not gifted massive country estates when they get married. What? They have to pay for it themselves? Yes, they do. No worries, you can, too!
Step One: Find out your credit scores. If you haven't already, you need to determine your credit score. You've seen the commercials on TV...a lot of companies can give you a credit report. Once you know your score, you can put together a plan. If your score is on the low side (650 and below), first make sure that the score is accurate. If it is, then work to raise it by paying credit cards on time, keeping credit card balances low, opening a new card, etc. Remember, if both you and your partner are filing jointly for the loan (counting both your incomes), then both need to have acceptable credit scores and credit histories. Bad credit isn't the end of the world; however, it can delay your plans until it's improved.
Step Two: Talk honestly about Debt and Financial Goals. The fact is that most people carry a little debt. "Good debt" is an investment, like student or home loans. "Bad debt" doesn't give anything in return, and in fact costs you more. Car loans and credit card debt are considered bad. Debt becomes a factor when applying for a home loan because of the "debt to income ratio." Different loans allow different percentages. There are many debt to income ratio calculators online to try. Just google it.
In addition to debt, partners need to discuss their financial goals. How quickly can I pay off my bad debt? How big of an investment to we want to make in a house? Will we stay or move as family grows? Will both spouses work after kids are born? How much to you want to put into retirement account? NOW is a great time to meet with a financial advisor. Ask your friends, parents, coworkers, etc. for recommendations.
Step Three: Budget. Ugh. Most of us think of budgets with dread because at work we're always asked to trim our budget. However, IF you change your perspective, you can find that having a budget can actually be freeing. Yes, freeing. It's a plan for your money that you just need to follow. It will help you pay down debt and keep your other spending in check. Hear me out: Once you put together your budget, you know that you have $250 to spend on clothes and shoes each month. So, if there's a terrific sale going on at Nordstrom, you know you can buy that darling coat. However, the next time you go out shopping and you find a cute dress at Banana Republic you might have to pass. No $$$$. Can't get the dress....until next month. See you are not being denied new clothes. You just have to be smart about when and how much you spend. Dave Ramsey has a great budgeting tactic where you place cash in envelopes for each of your budget items: groceries, gas, clothes, restaurants, etc. When the cash is gone, you're done spending in that category for the month. A lot of churches offer the Dave Ramsey class, "Financial Peace University" check around your community or visit his web site for other great ideas on budgeting www.daveramsey.com.
Step Four: Get Pre-Approved for a Loan. Before you start searching for homes and visiting open houses, get pre-approved for a loan. (FYI - In today's real estate market, an offer on a house won't even be considered unless the buyer is pre-approved.) A loan officer will help determine how much house you can afford and the best loan to help pay for it. From both a realtor and homebuyer's perspective, knowing what you can afford makes the house hunt much more rewarding. First, you won't waste time looking at properties out of your price range. Second, you won't long for upgrades out of your price range. Finally, you won't be disappointed.
There are so many options for first time homebuyers - even if you don't have a large income or down payment. A good loan officer can help you find the best fitting loan for your situation.
Step Five: Find a Realtor. You may think that with websites like Zillow and Realtor.com, that you don't really need a realtor. You can look at homes and call the contacts and set up showings...just like an agent would do. Right? Wrong. Real estate agents work for either the buyer or the seller. The buyers agent tries to get the best deal for the people buying the property. The listing agent tries to get the best deal for the person selling the property. So when you call about a property or ask the agent selling the house about the property, their first priority is their client, i.e. the person selling the house. Not you, the buyer. (Note: There is also something called dual agency, where the agent represents both the seller and the buyer; however, if you want an agent that puts your priorities first, then get an exclusive buyers agent.) In addition to having an agent represent your best interest, an agent can alert you to new homes about to be listed before they hit the web. Why is this important? So you can be the first to see a property, first to put in an offer, and the person who gets the house!
Congratulations on your new life as a couple! Even if you weren't born with a silver spoon in your mouth, home ownership can happen. Plan, budget, prioritize...you can do this!
Note: This was originally published on my real estate blog "Sarah Sell My House."
In addition to all the gazillion other perks of being a member of the Royal family, when you get married the Queen gives you an estate. Of course, Harry and Meghan already have Nottingham Cottage on the grounds of Kensington Palace in London. Not bad, heh?
But folks, here's some shocking news: The majority of newlyweds are not gifted massive country estates when they get married. What? They have to pay for it themselves? Yes, they do. No worries, you can, too!
Step One: Find out your credit scores. If you haven't already, you need to determine your credit score. You've seen the commercials on TV...a lot of companies can give you a credit report. Once you know your score, you can put together a plan. If your score is on the low side (650 and below), first make sure that the score is accurate. If it is, then work to raise it by paying credit cards on time, keeping credit card balances low, opening a new card, etc. Remember, if both you and your partner are filing jointly for the loan (counting both your incomes), then both need to have acceptable credit scores and credit histories. Bad credit isn't the end of the world; however, it can delay your plans until it's improved.
Step Two: Talk honestly about Debt and Financial Goals. The fact is that most people carry a little debt. "Good debt" is an investment, like student or home loans. "Bad debt" doesn't give anything in return, and in fact costs you more. Car loans and credit card debt are considered bad. Debt becomes a factor when applying for a home loan because of the "debt to income ratio." Different loans allow different percentages. There are many debt to income ratio calculators online to try. Just google it.
In addition to debt, partners need to discuss their financial goals. How quickly can I pay off my bad debt? How big of an investment to we want to make in a house? Will we stay or move as family grows? Will both spouses work after kids are born? How much to you want to put into retirement account? NOW is a great time to meet with a financial advisor. Ask your friends, parents, coworkers, etc. for recommendations.
Step Three: Budget. Ugh. Most of us think of budgets with dread because at work we're always asked to trim our budget. However, IF you change your perspective, you can find that having a budget can actually be freeing. Yes, freeing. It's a plan for your money that you just need to follow. It will help you pay down debt and keep your other spending in check. Hear me out: Once you put together your budget, you know that you have $250 to spend on clothes and shoes each month. So, if there's a terrific sale going on at Nordstrom, you know you can buy that darling coat. However, the next time you go out shopping and you find a cute dress at Banana Republic you might have to pass. No $$$$. Can't get the dress....until next month. See you are not being denied new clothes. You just have to be smart about when and how much you spend. Dave Ramsey has a great budgeting tactic where you place cash in envelopes for each of your budget items: groceries, gas, clothes, restaurants, etc. When the cash is gone, you're done spending in that category for the month. A lot of churches offer the Dave Ramsey class, "Financial Peace University" check around your community or visit his web site for other great ideas on budgeting www.daveramsey.com.
Step Four: Get Pre-Approved for a Loan. Before you start searching for homes and visiting open houses, get pre-approved for a loan. (FYI - In today's real estate market, an offer on a house won't even be considered unless the buyer is pre-approved.) A loan officer will help determine how much house you can afford and the best loan to help pay for it. From both a realtor and homebuyer's perspective, knowing what you can afford makes the house hunt much more rewarding. First, you won't waste time looking at properties out of your price range. Second, you won't long for upgrades out of your price range. Finally, you won't be disappointed.
There are so many options for first time homebuyers - even if you don't have a large income or down payment. A good loan officer can help you find the best fitting loan for your situation.
Step Five: Find a Realtor. You may think that with websites like Zillow and Realtor.com, that you don't really need a realtor. You can look at homes and call the contacts and set up showings...just like an agent would do. Right? Wrong. Real estate agents work for either the buyer or the seller. The buyers agent tries to get the best deal for the people buying the property. The listing agent tries to get the best deal for the person selling the property. So when you call about a property or ask the agent selling the house about the property, their first priority is their client, i.e. the person selling the house. Not you, the buyer. (Note: There is also something called dual agency, where the agent represents both the seller and the buyer; however, if you want an agent that puts your priorities first, then get an exclusive buyers agent.) In addition to having an agent represent your best interest, an agent can alert you to new homes about to be listed before they hit the web. Why is this important? So you can be the first to see a property, first to put in an offer, and the person who gets the house!
Congratulations on your new life as a couple! Even if you weren't born with a silver spoon in your mouth, home ownership can happen. Plan, budget, prioritize...you can do this!
Note: This was originally published on my real estate blog "Sarah Sell My House."
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