Spring, which is prime time for the housing market, also happens to be the one of the most popular seasons for weddings.
Planning a marriage often sparks conversations about where to live and whether to buy or rent; sometimes those talks end up with couples deciding to become homeowners as well as husband and wife.
While buying a home and getting married are among life’s happiest occasions, there’s no question that they can also cause a lot of stress.
“There are several things that you should avoid doing at the same time, if at all possible: changing jobs, having a baby, getting married and buying a home,” says Ryan Nicholas, a real estate agent with the DamonSellsHomes team at Coldwell Banker Residential Brokerage in Fairfax.
Whether you want to buy first or have your wedding first is up to you, but Nicholas says it’s best to keep the two events at least several months apart to reduce stress. One D.C. couple, Hillary Price and Jared Daiber, who married April 16, found themselves closing on a home just two months before their wedding date.
“We didn’t really think about the timing of our wedding and moving,” Price says. “We have the luxury of getting married anytime, but we felt like we needed to move quickly once we decided to buy a home because we wanted to buy while interest rates are still low and when there was more inventory on the market last spring.”
The couple, who lived together in a Logan Circle apartment in Northwest Washington for two years before getting engaged, opted to buy their home in the Trinidad neighborhood of Northeast after beginning their exploration of neighborhoods and properties in spring 2015.
“Lots of couples plan their home purchase and their wedding at the same time, but I think planning a wedding is more stressful than buying a home,” says their realty agent, Kevin Poist of Evers & Co. Real Estate in Washington. He says it typically takes three to six months to find a home.
For Price and Daiber, the home-buying process took about nine months, including three months of visiting open houses to help determine their priorities, which pushed their move closer to their wedding date.
“We thought we might want to buy a condo at first, but Kevin [Poist] helped us understand that a house in our $425,000 to $525,000 price range could be a better investment for resale value,” Price says. “We started looking at Petworth, Eckington, Ivy City and Brentwood and then eventually found Trinidad. We’ve been in D.C. five years and knew some of those neighborhoods but not all of them, especially the more residential communities.”
The decision to buy first or wed first depends on a variety of factors, including the couple’s current living arrangements and their finances.
“The D.C. market is still a great housing market, so pursuing your housing can’t necessarily wait, while a wedding can,” Poist says.
Nicholas says some couples he has worked with decided to buy the home before the wedding but have only one partner move in until after the ceremony.
“There’s no rule of thumb about what’s best,” he says. “Some people want to avoid stress before the wedding, but others want to avoid stress after the ceremony during the ‘honeymoon phase’ of their marriage.”
From a financial standpoint, the only drawback to buying before the wedding is that a prenuptial breakup can be stickier if the couple owns a home together, says Chris Copley, a regional sales manager for TD Bank in Philadelphia.
“Buying before or after the wedding makes more of a difference in a community property state,” says Sue Hoefs, lending director of the Montgomery County Employees Federal Credit Union. “Maryland, D.C. and Virginia are not community property states, so it’s really more of a personal preference as far as the mortgage goes.”
In a community property state, most property acquired during a marriage — gifts and inheritances are exceptions — is considered to be owned equally by both, so buying a home after the wedding might simplify matters later on.
Hoefs says unmarried couples can hold title to property as tenants in common or as joint tenants. The latter arrangement forms a closer partnership, including equal ownership between the two and the right of survivorship, or sole ownership, for either partner if the other dies. Married couples have the additional option of holding property as tenants by entirety, which includes the right of survivorship and the provision that the interest of neither partner can be sold or given away without the consent of the other.
Price and Daiber held their property as joint tenants until their marriage and then paid a minimal fee to change the arrangement to tenancy by entirety after the ceremony.
Whether you wed first or buy first, both events are major financial moments. According to TheKnot.com, the average wedding in the United States cost $31,213 in 2014.
“If you’re buying a home around the time you’re getting married, I think it’s smart to at least have the conversation about spending half as much on your wedding and applying that other $15,000 to your down payment,” Nicholas says.
An important first step for all buyers is to consult a lender before the house hunting process. Before starting their home search, Price and Daiber met with a lender for a loan preapproval and an estimate of how much cash they would need for the purchase.
“You should meet with a lender as early as possible when you’re thinking of buying a home to make sure you’re not putting the cart before the horse,” Copley says. “You need to set appropriate expectations for what you can comfortably spend.”
Copley says that when lenders check a couple’s credit, they will take the middle score of each partner’s three credit scores from Equifax, Experian and TransUnion.
“If one person has a low credit score, it could impact the ability of the couple to qualify for a loan or could cause their interest rate to be higher,” Copley says. “A lender can talk about ways to improve your credit or to qualify for a different loan program. If the couple decides to take out the loan based on only one person’s credit score, only that person’s income can be counted for the loan, which could reduce the amount they can borrow.”
Getting married doesn’t affect your credit score, but if you and your partner obtain credit jointly that can affect each of your scores.
Your lender can also discuss cash needs and the rules for using a gift for down payment money for various loan programs.
Combining your finances or keeping them separate is something each couple needs to determine for themselves, but when you plan to buy a home together it’s essential to be transparent with each other as well as your lender.
“Some couples combine everything, some combine nothing and some couples open a joint account for combined expenses such as the mortgage but continue to keep separate accounts for their own personal expenses,” Hoefs says. “For the down payment, as long as the source of the funds can be documented it’s okay to keep the funds separate if the couple prefers.”
Price says she and Daiber both contributed to the down payment and closing costs. To simplify the transaction, she transferred her savings into his account.
“If you have six accounts or something that could make for a challenging closing, but if it’s just two different accounts, there’s no necessity to transfer funds,” Copley says. “Remember that you’ll have to provide the source for any unusual deposits, including cash gifts around your wedding.”
Hoefs says any gift funds to be used for a down payment must be documented. She recommends being vigilant about your money and your budget throughout the wedding and home-buying process, particularly because your credit will be checked again before your mortgage is finalized and any increase in credit-card debt could change the lender’s decision on your loan.
“Buying a home and getting married are two of the biggest events in a person’s life and doing them at the same time can lead to financial stress along with other stresses if the couples aren’t prepared with specific budgets and savings for each event,” Hoefs says.
“Make sure you allow for ‘other’ expenses when getting qualified for a mortgage,” Hoefs says. “Do your own budget to make sure you have enough of a cushion each month to pay for improvements and repairs. Consider any future expenses such as day care so the dream home you are buying today is still comfortably affordable if your family grows.”
Copley recommends continuing to save while you search for a home, even if you have your down payment and closing cost money, so that you’re prepared for unexpected expenses.
Once your finances are organized for a home purchase, it’s time to work on coordinating your individual priorities to find a home that works for both partners.
“A lot of first-time buyers have different views of what they want and have trouble matching that with each other and with their budget,” Nicholas says. “A Realtor can help you sort through what you want and what you need. After we’ve talked about being flexible, I have each partner write a separate list of their top three ‘have-to-have’ items and their top three deal-breakers.”
If a couple starts to argue, Nicholas diffuses the issue by suggesting that they wait until they are calm to talk about their differences. He also suggests that they get creative and come up with a compromise so that each partner gets something and each gives up something.
“We knew no home would be perfect, or, if it was, we wouldn’t be able to afford it,” Price says. “Our priorities were to stay in the city, have three bedrooms and a dedicated parking spot. We compromised on central air once we realized how few homes we could afford had it.”
The couple also wanted space to have children eventually, an open floor plan for entertaining and a guest room for out-of-town friends and family. While Daiber prefers modern homes and Price prefers Victorians, the couple compromised in picking their circa 1939 rowhouse, which has the space they want along with the original hardwood flooring and moldings Price prefers.
“A good Realtor can help buyers work through their narrative and talk with them until they have clarity about what they want,” Poist says. “I can give them an estimate of the value of different aspects of the homes they look at and where the value will be in five years.”
Poist says educating buyers with the help of a lender and a title company, followed by making an emotional connection with the buyers, can relieve the stress of buying a home.
“However, I stay clear of the wedding planning,” he says.
Tips for combining households
Determining how to handle all the assorted possessions from the union of two households can be the one of the most difficult parts of the wedding and home buying experience.
“For many couples, the process of combining households has little to do with actual items and more to do with a sense of shared ownership in starting a new chapter together,” says Jonathan Neal, president of Metropolitan Moving and Storage in Laurel, Md. “Throw in the stress of planning a wedding and purchasing a new home and there are bound to be a few disagreements.”
Neal’s tips to de-stress the move include:
● Take inventory. Make a checklist of what each person has.
● Determine how to handle each item. Label everything as you take inventory. If you have two Keurig machines or two sofas, decide if one or both should be sold or donated. Your moving company may be able to suggest area nonprofits and tell you what they accept. Knowing what you plan to keep will help you decide how much space you need in your new home.
● Consider storage options. If you can’t agree on an item or aren’t sure what to do with it, paying for storage for the short term — or long term — sometimes makes sense. If you have art or decorative items that you want to keep but not display, store them in a secure, climate-controlled environment until you decide how to use them.
● Avoid arguments. Create a plan and stick to it so that you don’t argue on moving day.