Couples buying a house together: smart money advice for the big move

You’ve reached an important milestone.

After open conversations gave you and your partner a clear view of your combined finances, you’ve been preapproved for a mortgage and know your price range. Now the search for a home can begin.

Where should you start?

Wells Fargo specialists Rulon Washington and Mariana Martinez shared guidance to help couples move through the homebuying process more smoothly. Buying a home together is not only a financial decision, but also a major relationship step.

“Don’t underestimate what buying a home together means,” said Martinez, executive director and senior family dynamics consultant in Wells Fargo’s Wealth & Investment Management’s Advice and Planning group. “It’s showing a confidence in the strength of your relationship. For some people that’s a little scary, meaning fear and uncertainty are normal. Whatever feelings come up are normal … so let it emerge, work through it, and talk about it without judgment.”

Key takeaways

• The commitment involved in buying a home together can bring up fear or uncertainty.
• Talking openly about must-haves, flexible points, and future needs is essential.
• Keeping the process enjoyable and collaborative helps, as long as the budget stays front and center.
• The underwriting stage can be especially stressful, and following directions can reduce delays.

Shopping for a home

Wells Fargo recommends that couples find a real estate agent after getting mortgage preapproval. An agent can represent you, explain neighborhoods, point out what to look for in a property, and help negotiate with the seller if you find a home you like.

With your agent’s help, create a wish list of the features that matter most to narrow the search.

“You might have to interview a few agents to find the right fit,” Martinez said. “Be sure that they’re engaged and that it’s someone you feel comfortable having a lot of contact with during the homebuying process, for however long it lasts.”

Martinez said couples should try to enjoy touring homes while staying within budget and being honest about individual wants and needs. She also offered several ways to keep homebuying stress from spilling into the relationship:

• Be clear: “Know what is a must and what is negotiable,” she said. “For one person having a little bit of green space might be extremely important, whereas for the partner a double oven powered by gas is something they can’t live without. Make a list of your musts — there should be just a few — and talk about it.”
• Think about tomorrow: “What works today might not work in 10 years. Try to visualize as best you can changes that could come — children, physical needs, parents moving in — so you can be prepared for the short term and long term.”
• Divide the labor: “Everything that’s required for homebuying requires a lot of energy and skill. Try to find alignment between each person’s skills and the purchasing task at hand. If neither of you have the skills, then maybe the person with more energy or time to learn should handle that task.”
• Be respectful and trusting: “There will of course need to be some reporting back and forth about what each partner is getting accomplished. But you have to trust that they’re doing what you all agreed to do. When everybody wants to do everything, that often creates confusion and frustration.”

“Buying a home is so fundamental to a sense of rootedness that it’s a profound experience,” said Martinez. “It often brings to the forefront unspoken expectations — usually echoes from childhood and your family. Be aware of these feelings and expectations as much as you can. Share them with your partner as it’s another opportunity to learn about each other.”

The homebuying process

• Find a real estate agent.
• Make your wish list.
• Search for and find a home you like.
• Make an offer. If accepted, you may have to make an earnest money deposit.
• Earnest money is paid toward the purchase of a home, which demonstrates the buyer’s good-faith intent to complete the transaction. It’s typically 1% to 2% of the sale price.
• Complete your loan application.
• Consider a home inspection.
• Confirm if a home appraisal is required.
• Secure homeowners insurance.
• Review the closing disclosure.
• Finalize and sign your closing paperwork.

After closing

• Manage your mortgage account.
• Monitor key loan milestones.
• Review your escrow account, if applicable.
• Track your equity.
• Make your lender your partner.

Finishing the job

The most stressful part of the process may come after the major legwork is finished. At that stage, lenders review whether you meet the requirements for the loan you requested. That review includes a detailed look at your credit, employment history, income, assets, and property information.

It may sound straightforward: send tax forms, bank statements, and other documents, and you’re done. In practice, it is often more complicated than that.

“It’s a high-anxiety time,” said Washington, executive director of Mortgage Sustainability and Business Execution for Wells Fargo’s Customer Growth Segments Home Lending group. “The complex financial transactions have a lot of things tied to them. A seller could need a specific closing date to purchase a new home. You, as a buyer, likely only have 90 days at the same credit score/interest rate. So, it’s not the other things like inspections, lawyers, surveyors, etc., that will make or break a closing. More often than not, it’s documentation and time.”

Washington shared five steps to help the underwriting and closing stages go more smoothly:

1. Have a clear understanding of what’s being asked: “The underwriters are looking for specific things in each piece of documentation for which they ask. If they want bank statements dating back two years, send them exactly that. Don’t editorialize or make judgments on what you think they mean. Explicitly following their instructions can prevent heartburn later. Sending six pages of a seven-page document, as one example, can be problematic and impacts the timing in which you close.”
2. Create an open line of communication with your financial institution: “When you’re going through this process, your life is still going on too. As you’re managing and submitting documentation, you might hesitate to ask a question or assume your financial institution will ask you. It’s OK to check in with them, even if there’s nothing required of you. Build the relationship early, so you don’t have to later.”
3. Understand timing and deadlines: “You know what your closing date is supposed to be. Work backwards from that date to make sure you understand the timing of everything. Also, be cognizant of other people’s work schedules. For example, understand that sending documentation on a Friday afternoon versus a Thursday morning likely means an additional three days of processing because of the weekend.”
4. Understand your financial obligation: “Know that you’re going to be financially responsible for this amount, each month, for the next 360 months. When you get preapproved, it’s usually for a mortgage only. Sometimes property taxes, homeowners’ insurance — which you’ll want to shop around for the right policy — and private mortgage insurance are not included in the mortgage amount. So, even though your mortgage might be $1,000, your monthly payment will be more than that and can fluctuate throughout the years. So, make sure once all the smoke clears, you know the exact number you’re going to pay for everything, each month.”
5. Don’t go on autopilot: “Once people close and move into their home, the mortgage is kind of out of sight, out of mind. Make sure you’re engaged with your financial institution. A bank won’t truly know you’re in trouble if you’re not communicating with them. Say you have a large, unexpected financial commitment and miss a month of your mortgage. Having a relationship with your bank can be helpful if you experience financial difficulty. And remember, this is a 30-year relationship you’re in — you have to communicate.”

You’ve handled the hard parts together. With clear communication, shared responsibilities, and patience, you can finish strong and begin this next chapter with confidence.

“You have to be willing to give up some of your desires or needs for the benefit of your relationship,” Martinez said. “Buying a home is something most people do only once or a few times in their lifetime. Move thoughtfully, methodically, and enjoy!”

“And sacrificing is such a powerful thing. It’s a pure expression of the love people have for each other,” Martinez said.