Guest Post: Natalie Jones – homeownerbliss.info – Photo Credit: Pixabay
Two of the main reasons why some relationships fail are lack of communication and money issues. To successfully buy a home together, couples have to get their act together when it comes to communicating about finances. Buying a house is a huge decision that impacts your relationship and your lives. To work, and for your relationship to thrive, your house purchase needs to be well planned, with candid financial discussions and other communication.
How communication affects relationships
Communication is a vital component of a successful relationship. Each partner needs to know the needs and desires of the other and should feel comfortable expressing their goals and concerns. Lack of communication breeds resentment and trust issues. Communication is how partners determine their reality, that is, how they separate feelings from the truth. And in the decision to buy a house, small aspects can become more significant issues if not openly communicated. For example, partners in a relationship may not share the same goals regarding future children or even pet ownership. One person’s dream house might be a suburban home with a large yard, while the other might loathe the idea of lawn maintenance.
For these reasons, it’s crucial for both partners to communicate and be on the same page when it comes to home buying. Incompatibility in housing preferences is not necessarily fatal to a relationship, but holding back information to avoid a heated discussion can be. And one way in which lack of communication can rear its ugly head in a relationship is in financial matters.
How finances impact couples
Sometimes couples want to retain individual identities, so finances are separated. Another reason for this could be income disparities or pre-relationship wealth. Whether your finances are separate or shared, if the decision to buy the house is joint, then there must be some overlap of finances. Since buying a home is likely the most significant financial purchase a couple can make, it is essential for communication about the financial matters relating to purchase price and financing to be clear. Do not wait until five years into a house-poor relationship to express that you didn’t want to spend so much on the house. Discuss your finances and find common ground in your house purchase goals.
Home finance basics
Income and assets are going to drive payment affordability. This is another example of why clear communication on finances is crucial. When applying for a mortgage, you’ll need to know what your total verifiable income is for underwriting purposes. Typically, a conventional lender seeks to cap your monthly housing payment, which includes principal, interest, taxes, and insurance, to less than 28 percent of your pre-tax income. Beyond this, lenders look at your total monthly debt payments and restrict those payments plus the housing expense to 36 percent of your gross income. Even though you may be able to get approval, you should create a realistic budget on your own to see how the proposed payment fits into your goals. Just because you can afford a mortgage, doesn’t mean that the payment amount is the best decision for your relationship. For example, if your short-term plan is for one of you to stop working shortly, you might want to limit your payment to that projected income level.
Other home expenses
When you commit to homeownership, the expenses are more than your monthly payment. Maintenance expenses will pop up every year, sometimes unexpectedly and expensively. Be prepared for these expenses and create a contingency in your budget to cover them. Other costs that couples often overlook are the expenses of maintenance equipment, such as a lawnmower and snowblower. These tools are expensive and require annual tune-up and eventual replacement.
The decision to buy a house is an important one that can stress a relationship. By openly communicating and setting shared goals, however, a house purchase decision can be a joint one that will strengthen your relationship.
