Being pre-approved for a loan that will afford you and your spouse with the chance to own a starter home could be enticing. But if your payments are going to be steep and the two of you will struggle financially to stay on top of your bills, it may be a wise choice to step back for a while, pay down debts, and save money that can go toward a down payment.
Less Debt Will Aid With A Better Rate
Owing student loans or credit card payments will increase your debt-to-income ratio, resulting in higher mortgage loan interest rates or the possibility of being turned down by some lenders. If the amount that you and your spouse qualified for wasn't as much as you originally hoped for and this would lead you toward purchasing a home that wasn't your first pick, it will benefit you greatly to cut down the debt that you and your partner are responsible for and to explore several different lenders and what they offer in regards to a mortgage loan.
Avoid splurging for a predetermined amount of time. Set aside cash for bills and extras, but make sure that the amount that will be spent on recreational activities won't interfere with your budget. Open a joint savings account and use this account to sock away money on a weekly basis, which can ultimately go toward purchasing a single-family home.
More Cash On Hand Will Benefit You In Many Ways
When you have more cash at your disposal, you will be able to pay a larger down payment. As a result, your mortgage payments may be easy for you and your spouse to handle. Extra cash will also be useful when it comes time to pay closing costs or attorney fees, and you may need some of the money for unexpected repairs, renovations, or furnishings for your new home.
You May Decide Upon A Different House
While you are handling debts, saving money, and exploring different lending institutions, you and your spouse may have a change of mind and lean toward a different home style that is located in another part of the neighborhood.
If you are able to pay down your respective debts considerably and have accumulated a modest nest egg that will go toward homeownership, maybe you and your partner are interested in looking for a larger residence or one that can be renovated to provide plenty of room for a growing family. Meet with a real estate agent to discuss your and your partner's vision and to find single-family homes for sale.