As a newly engaged couple, you have a lot on your plate: creating your guest list, choosing a wedding venue and maybe even buying your first home together. This is an exciting time in your life, and you’ll want to map out your financial plan carefully. When you’re looking to pay for a wedding and a house simultaneously, here’s how to prioritize your goals.
Look at the numbers
Perhaps one of the simplest ways to prioritize your goals is to look at the numbers. Of course, setting a budget is essential for any major life decision. But before making any final decisions (planning a wedding, buying a home, or both), look at the actual costs as well as all your sources of funds.
- Planning your wedding can be expensive. As you begin planning your special celebration, you’ll need to decide on a venue, a guest list, the decorations, the food and so much more. The cost for each of these elements will vary depending on your choices. So, what exactly are your goals for your wedding? Do you want an indoor wedding? How many guests will you be expecting? Will you serve the fish or the chicken? What will you wear? Using a simple checklist can help you decide what your wedding must-haves are.
- Buying a home is one of the biggest investments you will make in life. At times, a major upfront cost of buying a home is the down payment. However, the idea that you have to put 20% down on a house is a myth. The right amount will depend on your financial situation, and certain loan programs allow as little as 3.5% or even zero down. You shouldn’t think it’s conservative to make a large down payment on a home, or risky to make a small down payment. If you can buy a house with less money down and become a homeowner sooner, that’s often the right choice for newlyweds with home buying goals.
- Gather all your income and savings. Looking over your income and savings will help you create a realistic spending budget. Then, with a set budget, you and your partner will have a starting point to help you decide how to best use your savings. Either way, you should discuss your finances with your significant other before getting married or buying a house.
Buying a home or planning a wedding? Dig deep into your priorities
As you can see, the costs of a wedding can easily equal the down payment for a house. So, with all your final numbers at hand, it’s time to dig deep and decide on your priorities.
Can you afford both a wedding and a home? With a little bit of compromise and proper allocation of your income and savings, you can manage both planning your wedding and buying a home. For instance, with a budget and some savings, here are a few ways you and your partner can maximize your money:
- You can purchase a home using one portion of your savings to buy your home and another to spend on your wedding.
- You can purchase a smaller, less expensive home and plan a backyard wedding, saving you the cost of an expensive venue.
- Is a larger, move-in-ready home your priority? Then consider a small wedding right now and a larger wedding-of-your-dreams after buying your home.
Start the mortgage process now
Once you and your partner have decided how to spend your money, consider applying for a mortgage before incurring additional expenses. It is best to work on the mortgage process before expenses affect your credit balances and savings. To start the mortgage process, you should:
- Find a lender who understands your goals and whom you can trust to manage your financial information.
- Get a pre-approval for a mortgage to begin house shopping, especially if you are in a competitive sellers’ market.
- Discuss different financing options and programs with your lender.
Are you and your partner ready to begin your new special journey together? Then contact First Centennial Mortgage to help you buy your first home. Talk to one of our trusted mortgage loan officers to find the best mortgage option that is right for you.
Know someone who is preparing for a wedding? Forward this blog post!