Since You Asked: Real Estate Edition
Wondering what to do about big purchases? We've got a solution for you.
Question: My partner and I are planning to buy a home together—the first for either of us—soon after we get married this year. Is this a good time to make such a big purchase, and are there any circumstances where it might make more sense for us to buy the home before our wedding, or in only one of our names?
—Roger D., El Paso
A: Houston realtor Jeremy Fain, of Greenwood King Properties (713-677-4337, greenwoodking.com), points out that many same-sex couples planning to marry have already been living together for some time. “So you may as well kill an extra bird with the same stone you’re throwing at all of the wedding logistics,” he says. “Buying a home during the wedding planning stages may be to your benefit, because you’re already in the mode of organizing a party with an absolute, non-retractable deadline.”
We also talked with mortgage expert Shawn Muncy, branch manager with SecurityNational Mortgage (512-329-0098, snmc.com/shawnmuncy) in Austin, who says that when it comes to financing a new home, there are potential issues for soon-to-marry couples to consider:
“Depending on the loan type, getting married could affect your ability to get approved. Because Texas is a community property state, the assets and debts of married couples are mutually shared. If just one of you would be on the loan (say, because the other has bad credit), and you’re looking to obtain an FHA, VA, or rural development loan, the debts from the spouse that is not on the loan would still go into your debt ratios. This means you’re qualifying not just with, for example, your car payment and student loans, you’re adding in your new spouse’s car payment, too, and that could make your debt load too high.
“If you purchase once you are married, regardless if both of you are on the loan, you will both be on title to the house and therefore each have a 50 percent interest in the property.” He also suggests consulting with your CPA, as your federal income tax may be affected depending upon which of you is on the mortgage.
Muncy also notes a scenario where a pre-wedding purchase might be in order: “If there is a reason that you both wouldn’t be on the loan, it might make sense to buy before the wedding so your future spouse’s debts aren’t included in the ratios. The only issue then is whether that spouse would be on title and have an ownership interest in the house. The answer to that could vary depending on your lender.”
“Each couple’s situation is unique,” he continues. “And there are several factors that could dictate the best course of action for you as a couple. Early on while you’re in the planning stages, reach out to a mortgage professional to discuss your specific situation and see what works best for you.”
Disclaimer from Shawn Muncy: All loans are subject to borrower and property qualifications. Contact a loan officer listed for an accurate, personalized quote. Security/National Mortgage Company Inc. is an Equal Housing Lender NMLS #3116.