Qualifying for Credit

Every time you and your spouse apply for credit, your credit score, and sometimes your full credit report, are pulled. The lender uses your credit histories and credit scores as the foundation on which they build their decision. First, they assess how much of a risk you are to them and whether or not they want to extend credit to you. The higher your credit scores and the better your credit histories, the more likely you are to be approved. Your credit scores and histories also directly affect the interest rate you’re charged and the repayment terms established by the lender.

Don’t be fooled into thinking your good credit supersedes your spouse’s bad credit either. If you apply for loans together, both of your credit histories and scores are evaluated. Depending on what you’re applying for, you may not have the option to apply separately. For example, when you apply for car insurance, the insurance agency asks you to list everyone living in your residence that is of driving age. Even if your spouse never drives your car, their credit may affect the insurance premiums you pay.

Interest rates

It is a well known fact that good credit borrowers are charged lower interest rates than those with poor credit. Higher interest rates also cause your monthly payments to be higher. Especially when you’re first starting out in married life, finances may be tight. If you’re trying to buy a car or home or obtain a credit card, higher payments may prohibit you from being able to afford the purchase. Plus, nobody wants to pay more than they have to for an item. Higher interest rates mean you’re paying more for the item in the long run.

Favorable Lending Terms

It’s not only the interest rates that are affected by credit scores and histories. It’s also the terms of the loans or credit extended. It’s not a secret that good credit borrowers receive better repayment terms. For example, the longest financing period for a car is typically five years. Good credit borrowers are a lower risk to financing companies, so they can usually qualify for the longest financing terms. Bad credit borrowers not only pay a higher interest rate, but they have to repay the loan in a shorter period. For a car it may be two to three years. Higher interest rates and shorter terms equal higher monthly payments and a higher overall cost of the purchase.

Credit Scores Matter

The overall effect is that higher interest rates coupled with shorter financing terms make your payments much higher than good credit borrowers who receive lower interest rates and longer repayment terms. This can push you into a situation where you can’t afford to make the payments, which can cause your credit score to spiral down even further. Establishing good credit histories and maintaining high credit scores is imperative to painting the best financial picture for your married life–whether it’s buying a house or obtaining a credit card for emergencies.

This post on credit scores and interest rates is part of a series on credit and debt in marriage.  You can also read about debt and marriage, free credit reports, and improving your credit score

Dating and Debt

When you get married, your two families become one and so do your personal finances–the good and the bad. It’s important to find out what your spouse-to-be’s likes and dislikes are, and it’s just as important to find out about their personal finances.

Uncover this information while you’re dating and hammer out your plans for the future during your engagement. Waiting until you’re married to discover bad financial habits and low credit scores can add financial stress to your relationship.

How to Talk About Debt

Money is one of leading causes of divorce so talking about your finances should rank as a high priority. You don’t want your marriage to end before it begins, so make time to talk about finances with your significant other.

Share the debts and expenses you have and ask what debts and expenses they have. People are often embarrased by or ashamed of the debt they’ve accumulated so if you explain your financial situation first then they’ll probably feel more comfortable sharing.

Financial Behaviors

You can also learn a lot by watching spending habits and observing certain behaviors. If they always pay with a credit card rather than cash or a debit card, this may be a red flag of credit card debt. Inquire if they pay off the balance on their card each month.

Of course he might put your mind at ease when he says he uses his credit card to earn points, but he pays off the balance in full. Or a red flag may wave if she says she only makes the minimum payment each month.

A fiancee that never seems to have money is another sign of a problem. It may be a sign of living beyond their means–spending more than they’re making. The way to get to the root of the problem is to ask the questions that give you the answers you need. Before you marry someone, you need to know everything about them including income, expenses and credit history.

Credit History & Debts

When you’re married, your credit history, credit scores and debts affect your ability to make major purchases. If your partner has a bad credit score and you’re buying a house, lenders may require a higher cash down payment or charge you a higher interest rate. It can even cause you to get denied for the mortgage.

In the current economy, credit scores and credit history play an even bigger role than ever before. It’s important that you enter into marriage with full knowledge of the debts and credit history that comes along with your spouse. It affects your ability to reach milestones in your relationship, such as buying a home, and your day-to-day finances.

Avoid Wedding Debt

Definitely avoid starting your marriage in debt because you threw a wedding you couldn’t afford. You can have a wonderful wedding and still be conscious of the amount you’re spending.

Throwing a smaller more intimate affair is back in style. This helps couples to save money on everything from the venue space and the number of invitations to the food and beverages served at the reception.

Shopping for gently used wedding dresses at high-end consignment shops or borrowing gowns from friends and family members help brides to save thousands of dollars on buying a new gown Remember you only wear it once.

Marriage & Debt

Finances are a leading cause of divorce because money problems can cause fighting and stress that trickle into the other areas of your marriage. If you go into your marriage with your eyes wide open, you can alleviate this problem in your marriage. Talk about your finances with your fiancée before you get married. Don’t dwell on the past and hold it over their head.  Instead make a plan for how you’ll handle your finances going forward together!

This post on debt and interest rates is part of a series on credit and debt in marriage.  You can also read about credit scores and interest rates, improving your credit score, and
free credit reports.

Bringing Debt into a Marriage

In my previous article, I wrote about the excuses that spouses give about having separate bank accounts.  One of those excuses had to do with paying down their spouses debt.  I’ve heard people with my own ears say that they won’t help their spouse pay down the debt they brought into the marriage.  If this is you, then you probably shouldn’t have tied the knot.  Selflessness comes with maturity, and selfless spouses take on the debt of their spouse as a team.  This is a less common situation, but it is out there. 

Debt in Marriage 

The most common situation is married couples that accumulate debt together.  The scenario is quite common.  You get married, buy a house, finance a couple of cars, pay the minimums on your student loans, and slowly accumulate credit card debt.  Before you know it, you’ve racked up $50k in consumer debt, not including your house.  We won’t worry about the house for now, because it’s an appreciating asset and the house acts as collateral to the loan. 

Get Out of Debt Plan

There are dozens of different get-out-debt plans out there, but I am going to share with you the one that my wife and I are currently following to get out of debt.  We hope to be out of debt in two years with this plan.

Step 1: Save $1,500 for a small emergency fund. Dave Ramsey teaches to save $1,000, but I’ve found that $1,000 doesn’t go too far when you have multiple emergencies at the same time. The amount is not the point. The point is that you can’t start aggressively paying off debt until you have a small cushion to help you pay cash when something unexpected comes up. Debt slowly accumulates from the small emergencies in life such as an unexpected medical expense or car repair. Don’t skip step 1! It’s #1 for a reason.

Step 2: List out all of your debts from smallest to largest. If all of your debts are close in amount such as $4,000, $5,000, $6,000, and $7,000, then you should proceeds to Step 2a. If not, then keep your debts listed smallest to largest, and start attacking the smallest debt first. This is helpful, because it builds momentum, cleans up the small debts quickly, and gives you more money to attack the larger debts later on. Only pay the bare minimums on the debts that you aren’t focusing on.

Step 2a: If your debts are of similar amounts, then list them from highest interest rate to the lowest interest rate. Attack the debt with the highest rate first. Then, work your way down the list and pay the lowest interest rate last, because it’s hurting you the least.

Step 3: Find creative ways to boost your income. This is important, because many of you with a lot of debt don’t have much extra money to put towards paying off debt. Find temporary, creative ways to boost your household income to pay off the debt as quickly as possible. Here are some quick ideas to boost your income.

• Have a Garage Sale
• Take a part-time job such as a driver for UPS, delivering pizzas, waiting tables, or baby-sitting.
• Start your own side business (fixing computers, consulting, professional organizing, landscaping, and making/selling crafts)
• Sell odds and ends on Craigslist and eBay
• Sell your blood Plasma. Don’t do this too much, you’ll look like a heroin addict.
• Participate on a medical research study. Yeah, I know, you don’t want to be a guinea pig, but I participated in three different studies and made over $1,500 when I was in college. I still have all of my arms and legs.

Step 4: Once you’ve paid off your last debt, go celebrate! You did it! Then, start building an emergency fund that will cover four to six months of expenses. Doing this helps you make sure that you’ll never get into debt again.

This method only helps you clean up your credit card, car loan, student loan, and other personal debt. Don’t include your mortgage as part of your list of debts unless it is a second mortgage. If you have a second mortgage, include it as part of your list, but save it for last. This step-by-step method only works if you are living on a strict budget, and you must have the dedication and perseverance to make it happen. If you have any questions, feel free to contact us.

For help managing your money as a couple check out the marriage budgeting tips. One sad, but necessary, thing to think about is how you’d pay off your debt if you suddenly lost you spouse, read more about buying life insurance to help protect your family.

These tips for reducing debt in marriage are part of the Marriage Money Guide.

When Should You Buy Life Insurance?

Here are some scenarios where you might want to protect your family with life insurance:

• If you buy a house together as a couple, buy life insurance. If one of you dies, then the other can take the death benefit and either pay off the house or invest it and pay the payment with the monthly interest that it earns.
• When you have kids. If you both die together in a car accident, you need to leave money behind for your children to live a happy and fulfilling life.
• When one spouse is a stay-at-home parent. If the primary income earner dies, the other spouse MUST be left with a death benefit to cover monthly expenses.

What Type of Life Insurance Should You Buy?

For a younger couple in these situations I would recommend level term life insurance. I think cash value life insurance such as whole life, variable life, and universal life insurance are horrible products for the consumer.  They attach a cash value account with a death benefit.  The problem with these products is that the investment accounts attached to these policies typically yield low returns and come with VERY high management fees. 

Honestly, these products only make life insurance agents richer, not you.  This is why many financial advisors and life insurance agents recommend these products, because they offer a higher commission than term life products.  Term life insurance is only a death benefit of a specified amount for a level amount of time, and the premium is VERY cheap for healthy individuals. 

For instance, I just looked on Zander Insurance for an instant term life quote, and I can purchase a 20 year policy for $750,000 for $342 bucks a year!  Don’t use a life insurance policy for your retirement investing.  Designate mutual funds, index funds, and real estate for your retirement nest egg.

How Much Should You Buy?

Buy 8 to 10 times of your yearly income. So, if you make $50k a year, then you should buy $400k to $500k in term insurance. The idea here is that your spouse could take that money, invest it in good mutual or index funds, and replace your monthly income with the monthly interest from the lump sum death benefit.

Where Should You Buy It?

You could try and inquire separately with companies like Met Life or Zander Insurance or you could check with your local insurance agent or financial advisor that you trust. Another option is to check online with an established company for life insurance quotes.

I told you this would be a topic that you didn’t want to read about! It’s okay. The only things certain in life are death and taxes. Face reality and prepare for the worst. You owe it to your family.

If you think your family needs a life insurance policy and are looking for ways to pay for it check out the marriage budgeting tips and coverage of joint bank accounts for married couples to help make a plan and work together towards it. 

This coverage of buying life insurance in marriage is part of the Marriage Money Guide.

Joint vs. Separate Accounts

I have a strong opinion about this debate. I think that all married couples, new and old, should hold joint checking and savings accounts. I understand the argument for separate accounts, but when you said “I do” at the altar, you made a commitment to become one cohesive unit. You are a team, and you need to act like one. When you choose not to share your finances, you are choosing not to share one of the most important aspects of your lives. You can give me all of the excuses about how it works better with separate accounts, and it’s too confusing to share money. The reality is that you don’t trust each other, and you won’t put the time into sharing your money. Don’t settle for the compromise of spending whatever you make. Your marriage is not a business partnership, and if you weren’t ready to give up control of your money, then you weren’t ready to get married.

Responses To Advocates Of Separate Bank Accounts

“She/He spends too much money, and he/she won’t listen to me when it comes to saving money” The answer to this problem is communication and/or marriage counseling, not separate bank accounts. If your spouse refuses to change their financial habits and they are reckless with money, then you don’t have a financial problem. You have a marriage problem. You need to find common ground as a married couple, and help each other rather than get mad at each other. If you can’t communicate and resolve the problem on your own, see a marriage counselor. There may be a bigger issue that one of you isn’t talking about.

“It’s too confusing to share money. I’m afraid that we’ll overdraft on our account.” This is the excuse of a lazy couple that doesn’t want to communicate and budget money together. The solution to this problem is getting on a budget, and planning how you will spend your money each month. Set aside two hours each month to go over your budget and finances for the month with your spouse.

“She/He brought more debt into the marriage. She/He should pay it off on his/her own.” I’ve actually heard people say this before, and it makes me cringe every time I hear it. When you get married, you are coming together become one person, one flesh. You work as a team, and you help each other no matter what. If your spouse is bringing in a bunch of debt to the marriage, it’s now your debt. I don’t care who’s name is on the debt. You have an obligation as a marriage partner to share that debt.

Strategies for Sharing Bank Accounts

Our Strategy: I married a girl who is more frugal than me. In fact, she makes fun of me for the gadget cravings that I get and my weakness for spending money when we go out at night on a date. I got lucky. I never worry about her going on a spending spree with our money. She follows our budget religiously. There was no question when we got married that we would share a checking and savings account. We have a Bank of America checking account for convenience, and we have an ING savings account for short-term savings. I have a 401k for retirement, and now that she’s working, we’re going to open up Roth IRA’s with Sharebuilder in the coming months. We’ve shared a checking account for three years, and it’s been a great decision. We sit down every two weeks to go over our finances and map out what we’re going to do with OUR money, even though I was the only income producer for the past three years.

Joint Checking Account with Two Separate Checking Accounts: If you simply can’t grasp the concept of having one joint checking account, then try this method. Keep a joint account that feeds all of your income into it, and pay all of your bills through this account. Keep a separate checking account for yourself and for your spouse. Divide up 5 to 10% of your income into the separate accounts. Make a pact that you can do whatever you want with that money and your spouse can’t question you about it (as long as its legal! haha). My wife and I do something similar with cash. We give each other a certain amount of money each month called “mad money”, but instead of putting it in separate accounts, we keep it as cash. I like having some cash on me at all times, because there are still situations in life where you can’t swipe a piece of plastic, and sometimes cash speaks louder than plastic.

Checking Accounts of Interest for Married Couples

• FNBO Direct
• Sun Trust Bank Checking
• Wachovia Checking
• Charles Schwab Checking

I know that i made some bold statements in this article, but I will stand by them. It was not my intention to offend you, but I hope it gets you thinking about your current financial set-up with your spouse. I am sure there are people out there that have separate checking accounts with a healthy marriage, but it is the minority. Think of this is a challenge to get you to think differently, not an attack on your current opinions. You must be on the same page with your finances, and sharing every aspect of it is part of the foundation of a healthy marriage.

For more money tips for couples you can read about budgeting money for newlyweds, tips for finding an apartment after marriage, and a couples guide to buying an affordable house.

This article on joint bank accounts in marriage is part of the Marriage Money Guide.

1) Ask your caterer where you can cut corners – compare prices between a buffet and individual meals. If you caterer has been doing this for any length of time, they should be able to design a package that fits your budget.

Don’t let your caterer talk you into going overboard. Talk to your future husband or wife, and decide what the two of you want most.

Everything over and above that is a bonus, but not required. If you go in with that mindset, then you will not end up paying unnecessarily for seven or eight types of Hors d’Oeuvres.

2) Invite Fewer Guests to Your Wedding and Reception – If you are paying by the head, or by the plate, fewer guests means less expense. It is so easy to go overboard when inviting guests to a wedding. Just make sure the people you really want to attend are counted first, and invite the rest according to your budget.

3) Go “pot luck” - You can always opt for an informal reception and ask your guests to bring a dish. You are virtually assured that everyone will have enough food, and that the food will be the best anyone can make. After all it’s your wedding, and these are your friends and family. They will cook up something special for your big day! Do make sure that you have enough drinks and things on hand, and keep a list of what everyone is bringing. There’s no sense leaving it completely to chance!

4) Skip the open bar, or limit the choices – The bar is the big deal breaker for many weddings. Most places require deposits, attach extra fees, and force you to pay by the bottle – even if the entire bottle is not used up. You can save a lot of money on your reception by skipping the open bar entirely, or by deciding with your future spouse exactly what you want to serve, and how much you want to spend. Make sure that your caterer is on the same page though, or you could be in for an ugly surprise after the wedding.

5) Consider serving only one, or at most two meats – every meat you add to your menu will up the price of catering considerably. Find one that your think your guests will enjoy, and stick to that. Also, consider a vegetarian alternative. It’s going to be cheaper, and allow your guests who don’t eat meat to feel like you considered them in your plans.

6) Consider local restaurants - You do have to have a catering license to cater an event, but more and more local businesses are getting them. If the place down the street has amazing chicken or barbeque, then why not hire them? Having a well known local place cater your wedding is going to be a lot more fun, and cheaper, than the standard rubber chicken buffet fare.

Of course, the reception is only one of the major expenses of a wedding. Some other places you can cut costs are saving money on wedding pictures, planning a low cost honeymoon, and reduce the expenses of planning your wedding.

These wedding tips on cutting the costs of your wedding reception are part of the Marriage Money Guide.

Photo Credits: pumpsandgloss.wordpress.com

Here are some other ways you can save money on your wedding:

• Save money on your wedding dress
• Save money on a destination wedding
• Save money planning your wedding

This list of ideas to save money on your wedding pictures is part of the Marriage Money Guide.

Photo Credits: pixcellence.co.uk

How to Save Money On Your Wedding Dress:

1. Make use of sample sales – Sample wedding dresses normally come in sizes 6, 8, and 10. Occasionally you can find plus size samples as well, you just have to call around. Buying a “sample” dress can save you a lot of money and you can always have minor imperfections or dirt removed before your big day.
2. Shop for your wedding dress on Ebay – Ebay features a nearly limitless train of wedding dresses both used, and new. You can even set up alerts and Ebay will email you any time a new dress is listed. Start early enough and you are sure to find your dream dress at a fraction of the price. Make sure you buy from a reputable seller though, and be aware of the return policy in case something is not exactly right.
3. Search Craigslist – Sometimes you can find excellent deals on wedding dresses, and other wedding items on Craigslist. The sooner you start planning your wedding, the longer you have to look for that perfect dress for yourself or your bridesmaids.
4. Check out Brides Against Breast Cancer - Brides Against Breast Cancer is a charity organization where brides donate their dresses, and new brides purchase them. The money from the sale of the dresses goes toward breast cancer research. By buying your dress through them you not only get a gorgeous dress at a discount, but you help out a great cause too. Not all the dresses are used either – many designers donate the previous season’s dresses, as do bridal warehouses.
5. Wear Your Mom’s Dress – Wearing your mother or grandmother’s dress can really make your big day special since you are wearing part of the history of your family. If you do this make sure that you have plenty of time to take the dress out, try it on, and have it altered or repaired before your big day. Depending on how well their dress was stored, you may not have to do anything but have it cleaned, or you may have to take it to have sections that were worn or damaged by time repaired.
6. Find a Talented Tailor or Seamstress – An expert tailor can take an ill-fitting or worn dress and turn it into something spectacular – a made to order, perfectly fitting jewel for your wedding day. I do not recommend using the tailor that your bridal salon will suggest. At least, not before you check them out! They may turn out to be a specialist, or they may turn out to be a struggling business person giving kickbacks to the salon. Don’t trust your dress alterations to just anyone. The money you spend with them is as important as your dress, because the finished product – how well your dress flatters you – is up to them.
7. Choose a classic dress without a ton of fabric or beaded embroidery – The less fabric the dress is made from the cheaper it will be. Also, having to alter a dress with a ton of detail will make even the most experiences seamstress cringe – and it may not look as good when they are finished. A classic dress with simple lines and a minimum of beading and detail will not only make you look nice, but be cheaper at the store, and at alteration time.
8. Before you set a wedding date, call your local bridal stores and ask them when they usually run their sales - If you can time your wedding with their sales and discounts, you (and your bridesmaids) can get much more impressive dresses, for far less money.
9. Ask for a pre-sale preview – If you aren’t afraid to ask, then this will net you first crack at the sale and discount dresses, and most bridal stores are happy to accommodate you. After all, you can always have them place the dress on hold until the sale is official.
10. Spend some time thinking about what you envision your dream dress to look like, and give some consideration to which type of dress will look good on your body shape – no two women are the same, and not all wedding dresses look good on everyone. If you have an idea of what you want, then you will save time, and money when you start searching for your dress.
11. Get designer dresses at a discount – If you absolutely have your heart set on that couture wedding gown, then the internet is your best friend. Search, search, search, until you find it on sale. You can find the real designer dresses as much as 50% off, and the designer knock offs far cheaper than that.

For other ways to save money on your wedding, read how you can save money on a destination wedding and save money planning your wedding without spending a fortune.

This list of ideas to save money on a wedding dress is part of the Marriage Money Guide.

Photo Credits: alibaba.com

The Basics of Budgeting for Married Couples

• Start doing it the moment you get married. The more you wait to start a budget, the less likely that it will become a habit in your household.
• Create a budget together. One of you might like maintaining and forming the budget than the other, but you BOTH need to be present to contribute to the budgeting plan for that month or period of time.
• Choose how you will keep your budget organized. You can use a pencil and paper, Microsoft Excel, Quickbooks, MS Money, or you can use an online application such as Mint.com.
• Write down all of your monthly recurring bills such as utilities, mortgage, cable, debt payments, and insurance. Then, estimate your other monthly expenses that tend to fluctuate such as food, gas, entertainment, clothing, and car maintenance.
• Continue to tweak your variable expense allowances over the next three months.

Budgets are not perfect, and they can make life a little frustrating at first. It’s no different than starting an exercise regime. Your body will resist the exercise at first, because it’s not used to doing it, but it will get easier the more you do it. Budgeting is the same way. Here are some common budgeting struggles that newlyweds often face:

One spouse is on board to budget, but the other is not. Talk through it, and try to figure out the root of the issue. Do you share the same goals with money? If you can’t come to a resolution, then seek out marriage counseling. You can’t have one spouse following a budget while the other spends whatever they want. It won’t work.

Neither one of you has the will power to follow the budget. Seek out another couple to keep you accountable. Ask friends of yours to keep you accountable with your budget. They can call you once a week to see how it is going. If you have someone else asking you about it, it will help you follow the budget better, because you’ll feel embarassed if you keep telling them that you busted the budget.

You get easily frustrated that the budget isn’t working. You will not get immediate results with a new budget. It takes three or four months to tweak the budget and start seeing results. Once you get it right, you’ll quickly see how much more money you have at the end of the month.

Here are a couple of free excel files to help you track your plan to get out of debt and create a budget.

• Budget Worksheet
• Debt Elimination Plan

Remember, budgeting is a way of life. You must develop the habit of budgeting, or you’ll drop it like any other fad. Once you see the results and the immediate income boost by spending your money on paper before you spend it, you’ll get excited. So, get excited, and start your budget today.

• At least a 3% down payment
• Enough money to cover closing costs (you might be able to get this paid by the seller)
• Make sure you are going to stay in the same town for more than 2 years.
• Pay off any old debts or collections

Now, here are four steps that you can take to find an affordable house:

Research and hire a great real estate agent.

It’s a misconception that you can save a lot of money buying a for sale, buy owner house. Many FSBO sellers overprice their homes, and they are unwilling to compromise to get a deal done. Hiring a real estate agent can be the worst or best thing you’ll ever do. Do your research, and prepare interview questions when hiring a real estate agent. Stay away from family real estate agents unless they are really good at what they do and if they are willing to give you a cut of their commission. A great real estate agent can save you a ton of money if they are great negotiators. Great real estate agents are also great at finding hidden deals on the market.

Seek out short sales, bank-owned, and pre-foreclosure properties

Right now, you can find a huge amount of these distressed properties. A short-sale property means that the owner is upside down on their mortgage loan, but the mortgage company is willing to accept a sales price less than the amount of the mortgage upon their approval of the price. Everyone wins in this situation, because the seller doesn’t have to pay the difference to the their lender and you get a good deal. The problem is that these deals take a while to close, and mortgage companies are often stingy. Pre-foreclosures are simply properties that are somewhere in the process of being foreclosed, but the owner is still in legal possession and has the right to sell the property. You can find a deal here, but typically the seller doesn’t have much room to negotiate given the high mortgage amount, but they might be willing to update the kitchen, pay closing costs, and pay for a home inspection.

Negotiate your butt off

Start with a low offer, and prepare to start the negotiation process. Give yourself enough room to negotiate a price that you can afford. For instance, if the asking price is $200,000, then offer $150,000. They might counter back, but you could end up paying $175,000 when it’s all said and done. If you had originally offered $175,000 and they make a counter offer, you’ll probably end up paying $185k to $190k. Other great negotiating tools are closing costs, home inspections, a year’s worth of property taxes, and upgrades to the house. Have fun with it, and be willing to concede on a few of your demands in order to make the deal happen. If you want to find out how realistic the asking price of a home is, try looking it up on Zillow.com. Zillow takes the comparatives of other similar houses in the area that recently sold and formulates an estimate of the land plus the house.

Calculate how much you can afford before you start looking for a house

Add up your total gross income between you and your wife. Then, divide it by three. This is the maximum payment you can afford without feeling house poor. So, if your calculation comes out to $1,500, then you should start looking for houses in the $200k to $250k range. This is one of the most important tips for finding a house that you can afford. You must know your price range ceiling before you start looking at houses. Agents will try to get you to buy outside of your range, but be firm with them. Only look at houses out of your price range that you would plan on offering less than the asking price.

Conclusion

You can find a great deal on a house right now, but don’t get caught up in the moment. Renting for a little while is always an option. Buying a house is a great investment, but it can also be a huge burden on your marriage. I would not recommend that any newly married couple buy a house in their first year of marriage. I’ve been married for three years, and we bought and renovated a condo in our second year of marriage. There were some rough times, and painting ceilings at 12am wasn’t our original idea of being newlyweds. If both of you were well-established financially before you got married, then buying a house right before or after the wedding might not be so bad. Don’t take the housing process lightly. Be wise and use common sense. You’ll be fine. Good luck!