If you’re like most people buying a home, you want to do everything right – and that includes getting a mortgage, finding the right location and choosing a home that’ll be a good fit for you now, five years from now, and two decades from now.
But check out these common mistakes couples make when they’re buying a home together. That way, you’ll know what to avoid.
3 Mistakes Many Couples Make When Buying a Home
Many couples make these mistakes:
- Not discussing credit histories
- Not considering title options
- Making house payments separately
Here’s a closer look at each.
Not Discussing Credit Histories
When lenders are considering your mortgage application, they take the lowest score available – so if one of you has better credit than the other does, you can’t count on that person’s score to get you a good rate. With that lower score, you could need to come up with a higher down payment, get a higher interest rate, or maybe not even qualify for a loan at all.
Not Considering Title Options
When you own a home with someone else, the title can still go one of three ways:
- You can have a sole owner, which means only one person holds equity in the property.
- You can have joint tenancy, which means if one person dies, the other automatically inherits that person’s stake in the house.
- You can be tenants in common, which means if one person dies, the only way ownership totally transfers to the other party is if he or she is in the will. Otherwise, the deceased owner’s heirs will inherit that person’s shares in the home.
Making House Payments Separately
You can both contribute to house payments, but things are usually easier if you create a joint account that you use only to pay for the mortgage and other expenses. You typically can’t write two separate checks for your home mortgage – so even if you don’t want to mix your finances, it’s a good idea to have one account just for the house.
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