We bought two houses together before being engaged or married, and lived to tell the tale. Imagine that!
Each and every couple will have differing opinions on making a real estate investment together before they are married. Some would rather wait until they have a ring on their finger; some would rather wait until the wedding is over; some choose not to live together at all until they are deemed Mr. and Mrs.
One year after dating each other, my fiancé and I decided to buy a house. Was it risky? Sure. Did a lot of people say, “What if it doesn’t work out?” You bet. Arguably, investing in real estate is an even larger commitment than marriage. You combine assets to procure a mortgage, and from there, everything is split down the middle.
After we purchased a condo in 2017, sans engagement, a lot of women I knew reached out to me and asked if I was nervous. They said I was brave. All I said was that our love for each other was stronger than anything, and I knew we were going to get married. Be confident in your decisions!
About a year and a half later, we got engaged. Two months after that, we decided to flip and sell our condo. Again, we were in a similar situation: Engaged, but not married, finagling money, signatures and assets and making major monetary decisions without being husband and wife. Things got trickier as we calculated the sale of our condo while aiming to buy another house – and saving for our wedding.
Through our multitude of experiences, there are a few key learnings that I’ve gleaned that I’d like to pass along:
Get Financially Naked
-Discuss your individual debts: Student loans, car payments, credit card balances. Now’s the time to lay it all out in the open because you will be inheriting the other’s debt and vice versa.
-Discuss your individual monthly net income: After taxes and deductions, what can you singularly contribute to your bills? Will it be a 50/50 split? If that’s not the case, are you both okay with it not being that way?
-Discuss your individual savings plans: This is inclusive of 401Ks, Roth IRAs, CITs, bonds, stocks, and other assorted investments. All of your income and investments will add up to the gross amount that a bank will see, and approve you for from a loan perspective.
-Develop a short-term and long-term budget (i.e. one year plan, five year plan, 10 year plan).
After discussing the above, you can begin to paint a realistic picture of what your joint contributions to a mortgage and bills would be like, while still having a comfortable safety net for savings – and be able to indulge in the fun stuff that life has to offer.
Don’t Listen to Other People
Everyone is going to have something to say. Sometimes, I got insecure about my decision-making, until I realized that WE were making OUR decision. Some told us to sign pre-nups and have paperwork drawn up to protect our individual holdings, God forbid we broke up. We weren’t about the negativity, and didn’t need the safety blanket drafted in legalese. Sure, shit happens, but if you are 100% confident in taking the plunge with your significant other, then that’s what you follow through with.
Communication is Everything
-Both of you need to be on the same page about your joint decision making. Want to combine all of your financial accounts into one? Won’t work if one person wants everything separated. Is your purchase budget 600K while your significant other’s is 300K? Time to reevaluate and go back to square one.
Before jumping into any major commitments, lay all of the cards on the table about what each of you wants. Be honest with one another. Discuss your short-term and long-term options. And, most importantly, ensure that you are set on spending the rest of your life with one another.
Just remember: It’s okay to close on a 30 year mortgage before donning those diamonds or saying “I do.” I am living proof (x2).