Buying a house before wedding?

posted 3 years ago in Home
Post # 3
9137 posts
Buzzing Beekeeper
  • Wedding: November 2013 - St. Augustine Beach, FL

If you’re willing to make a 30 year commitment on a mortgage, you’re ready to make a commitment for marriage.  It’s easier to get a loan once you’re married and you both are fully protected in ownership once married.  However, if you want to buy the house first make sure that your rights to ownership of the home are protected.  Also, realize that if he dies before you get married you might end up fighting with his family over ownership of the house.

P.S. You usually cannot get a loan without some money for a downpayment.  Standard requirement is 20-30% of the purchase price of the home.  If you put down less than 20%, you are required to take out a second loan for the downpayment and you also have to buy extra insurance to cover the missing downpayment.

Post # 4
195 posts
Blushing bee
  • Wedding: October 2013

Would you get enough wedding money for a downpayment?

and yes, anything you can put towards the house will straight away increase the equity you have in it. 

If it was me – the house would be my priority, but everyones priorities are different!

Post # 5
3948 posts
Honey bee

@Klehman0589:  We bought a house before we were engaged and it was the best decision we could have made. It was just as easy to get a loan as it would have been had we been married.

However, in your situation given that you dont have a downpayment, I would say you should not buy a house right now. I’m not sure if a bank would even give you a loan without it but what if the house needs a new roof or something breaks? You wont have any money saved up to fix it.

Post # 6
1822 posts
Buzzing bee
  • Wedding: May 2013 - Pavilion overlooking golf course scenery, reception at banquet hall

Do NOT buy a house if you don’t have extra cash lying around. In most housing markets right now, competition is tough and if you have no downpayment and there are other offers, the seller will always pick the other offer (it is “safer”).

That is ignoring the fact that buying a house is EXPENSIVE out-of-pocket. You have to buy an inspection, an appraisal, realtor fees, fees to the bank, sometimes a survey, pay earnest money, and often go out and buy things that you take for granted in an apartment like a refrigerator. You are suddenly responsible for property taxes and homeowners insurance, and there will also be a thousand things you will need to buy for new home ownership that you never even think of.

It doesn’t seem like it, because of direct rent-to-mortgage dollar comparisons, but houses really are more expensive to live in. Your utilities go up, you’re responsible for ALL maintenance, even with huge things like a hailstorm destroying your roof you still need you to pay a giant deductible if you want it fixed (and it has to be fixed; no waiting to save up for it)

Edit: And equity is tricky. If you get a loan with no downpayment you will have a higher interest rate. The first few years of a loan, you are paying 90%+ to interest ONLY, not to the principal of the loan. And I still don’t think you can get a loan with no downpayment – IIRC loans like that are what caused the 08 crash, and banks won’t do it anymore.

Post # 7
11300 posts
Sugar Beekeeper
  • Wedding: August 2013

You need to have a downpayment. You will not get approved without one, unless you qualify for a VA loan. Also, I would not purchase a condo.

Post # 8
2642 posts
Sugar bee
  • Wedding: September 2012

@Klehman0589:  Honestly, I don’t think it’s a very wise financial decision to buy a house with no down payment.  It’s one thing to be able to afford a good loan with your salaries, but with no down payment, you’ll have a harder time getting a good loan.  You’re going to have to pay private mortgage insurance and you’ll be stuck with a much higer interest rate.  So in the long run, it might actually save you much money, if any at all.

And if you don’t have money for a downpayment, do you even have money for general house maintainence?  When you move into a new house there is almost always something you’ll need to fix right away or within the first few months. Remember, you will now be responsible for everything.  So if the roof leaks, you’ll have to fix it, if the AC breaks, you’ll have to buy a new one, if a pipe bursts you are going to be responsible for the clean up and pay for all the repairs.  Plus, if you have a yard, you’re now the one that has to maintain it.  So in addition to there being stuff you’ll have to fix right away, there’s other random stuff that you’re going to have to buy right away (hose, rake, tools, etc.).

Also, unless you can get the seller to pay for closing costs, you are going to need some cash to help with that.

It sounds like you should just keep renting until you can afford to put down a good down payment.  It does suck to throw money away in rent, but it’s probably better to do that then get stuck with a higher interest rate or PMI.

Post # 9
7281 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

You need money for a down payment, unless you are willing to buy in a rural area (USDA loan) or an urban area with problems (special homesteading loans), or you are veteran eligible for a VA loan. Since you want to buy a condo, you may have trouble getting a VA loan, and even have trouble getting an FHA (3.5% down loan) due to high Federal standards regarding owner-occupancy levels in the condo buildings, standards regarding condo board stewardship/financial health, and standards regarding the physical condition of the condo building as a whole. Which leaves you with conventional lending as your best option (minimum 5% down payment). And then you need money for closing costs (equal to 3-6% of your purchase price). And after paying all of that you will still need an emergency savings fund worth 3-6 months of your expenses. So basically, you need a healthy savings before dipping your toes into ownership. If you can save up a 5% down payment, another 6% for closing costs, and a 3-6 month emergency fund between now and winter (when you would need to start shopping for a spring closing), then go for it. If not, look at what expenses you can eliminate from your budget in order to start the saving process.

Also, ask yourself if you REALLY want to live in a condo for the next 8+ years, because that is how long you will need to live there in order to break even on its eventual sale with such a low down payment. Do you think you will want to have kids in that time? Will you want to start a faily while living in a condo? Will you be happy being that close to neighbors for the next 8+ years? I’m not making a judgement. These are just things you need to think about for yourself.

Post # 10
4576 posts
Honey bee
  • Wedding: September 2014

Multiple loans come across my desk *every day* with no down payment. Totally depends on the program you qualify for and get in under.

We may be getting a house before we get married as well: our lease we just resigned goes out in June 2014 and our tentative date is September 2014. So yeah, we may do the same.


Post # 11
2372 posts
Buzzing bee
  • Wedding: September 2013 - B&B

My FI and I are doing this… but we (ok really HE) had several thousand dollars for the down payment. We were able to do this because #1) the housing market where we are buying is RIDIC. You can buy a decent house in town for $75k. I am not exaggerating! We also got an FHA loan, and our seller agreed to seller’s assist, because she REALLY wants to sell. So we only had to put like, 3% down because the seller was willing to receive 3% less from the bank to get the house sold fast. Another really important thing to note, is we are buying a triplex (three apartments in one) because we are buying for investement. We do plan to occupy one of the apartments in the meantime, but eventually we will move out and rent out all three. In doing this, in a sense, we are technically having someone else make our monthly mortgage payments (and part of the bills). As a PP mentioned, you will want to look for a place you want to live in for some time, as you mostly pay interest for awhile with your payments. We intend to keep this place and continue renting it out even after we do not live there. While we live there, we are in a position to save money for a down payment AND also help pay on the mortgage. So we will be making double mortgage payments and saving ourselves. This will help us be able to genuinely get some use out of the equity in a few years’ time.

We have run into SO many problems not being married, but also having just gotten new jobs. Most lenders are going to want to see at least 6 months of employment! My FI graduated in Dec with a degree in forestry, and in March started a job, in forestry. They don’t see it that way. They see it as, he went from part time in the restaurant industry to the forestry industry, and that to them is too unstable. I was saved only because I went from “fundraising” to “fundraising”.

Everyone’s situation is different but because we aren’t married, we ran into all kinds of trouble. For instance, because of his job situation, they won’t put him on the mortgage. Ok, fine. But since he’s not on the mortgage, and we aren’t married, they won’t count any of his income. We also had to prove we were engaged before they would even let him sign a piece of paper stating that money that had already been put INTO the joint account was mine to use, and we had to provide a paper trail of his deposits to show where they came from. Our insurance is going to be higher because even though I am listed as a secondary driver on his auto insurance (where we are also getting the home insurance), because we are not married and the mortgage is in my name, I cannot qualify to be part of his multiple policy discount. Until we get married. Just a couple of the problems we ran into.

Something I learned (the first time I thought this was all going to fall through) if you deposit money into a joint account for the home, like if you use wedding money, DO NOT just deposit cash. Give the cash to a parent or trusted relative and then have them write you a check and deposit that as well. Lenders are very suspicious of cash deposits and I have heard they sometimes won’t count them toward money for a down payment or closing costs!! And if you already have a joint account or plan on getting one, don’t move money around TOO much because you will have to show all those moves and transfers.

It is exciting and if it can truly be an investement, go for it!! But there is ALOT to take into consideration, much more than “I would rather pay on a mortgage than pay rent.” Good luck!!!!

Post # 12
10384 posts
Sugar Beekeeper
  • Wedding: September 2010

“Our biggest issue is we won’t have any extra cash for a down payment.”

Unless you have minimum 3.5% down, 6 months of mortgage payments in reserve, and $5k-8k for closing costs you’re almost certainly going to get turned down. It isn’t just about how good your credit is. They want to see you taking on some of the risk in the form of putting money down.

Condos are also a special financing situation. Most banks want 20% down for condos since they are generally a riskier investment (harder to sell in most markets). They usually also want to see that the HOA is not involved in any litigation, and that at least 75% of the units are owner occupied (that number varies by bank – ours wanted 80%).

Are condos a good investment in your area? It seems like that region would be less amenable to a good condo market, given the low cost of living and the suburban sprawl. We bought a townhouse style condo, but that is the norm for housing in our area. I’d look at average days on market for the type of property you are considering. You may find that condos linger a lot longer and sell for less than you are hoping, especially when you consider that HOA fees will eat into your monthly budget and won’t give you equity.


Post # 13
4638 posts
Honey bee
  • Wedding: September 2014

I wouldn’t buy a home without a downpayment, my FI and I have bought 2 homes and both were purchased with hefty downpayments. If you don’t have the funds available for a downpayment, then you don’t likely have them available for things like closing costs, or condo fees (if that’s the route you take).

Post # 14
1891 posts
Buzzing bee
  • Wedding: September 2014

@lovekiss:  Wow… This is super informative. Thanks for the info, even though I am lurking.

Post # 15
11604 posts
Sugar Beekeeper
  • Wedding: November 1999

I don’t think you really can get a place without a downpayment – even the FHA loans require a 3.5% downpayment.

Personally, i think this is very dangerous.  DH and I are just buying now, and the amount of money it requires in addition to the downpayment (settlement fees, title fees, closing costs, etc) is frightening! 

Post # 16
7281 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

@bebelicious1:  You’re welcome. I think this board/group of ladies has a lot of really smart home buying tidbits to offer. There is just so much to think about!

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