Barbee Dream Homes Real Estate Group, LLC
Joe L. Barbee - ABR, MRP ~ Jennifer F Barbee -Realtor
Love may be blind, but if you and your significant other hope to buy a home together someday, it's important to go in with your eyes open. That can mean you'll need to pop some questions about money—right now.
"Couples often go house shopping first before they even think about the mortgage," said Chris Lewis of Angel Oak Home Loans. "But that's like getting married before your first date!"
Talking about finances with your partner can be uncomfortable, but let's face it, while you may love her quirky sense of humor or his sunny smile, a lender is looking only at the cold, hard numbers. And even if your finances are in order, if your partner's aren't, it could jeopardize your home-buying dreams.
"When a couple purchases a home together, lenders will assess the couple’s ability to purchase jointly," explains Lewis. "One person’s credit or income could affect the couple's ability to qualify for a mortgage at all."
So before you start hitting open houses, make sure to ask these questions to help you size up the person you love like a lender would.
How much debt do you have?
If you two are serious, odds are you've talked about each other's incomes, but if you've never talked about debt, brace for some surprises—the bad kind.
"A lot of young people have serious student loan debt," says Lewis. According to Pew Research, 37% of people under 30 still owe on their educations, to the median tune of $25,000 for a bachelor's and $45,000 for a postgraduate degree.
You should also both come clean about your credit card debt. It's going to come out anyway: Any debt you're carrying will show up once you undergo the pre-approval process for a mortgage: car loans, personal loans, and even child support obligations (that's a whole other kind of surprise).
All this matters because of a thing called your debt-to-income ratio—that's a number your lender will look at to decide if you can afford to pay back a loan. To get it, the lender will add up all of your monthly debts and divide them by your combined monthly income. To qualify for a mortgage, that number cannot be over 43%, according to the Consumer Financial Protection Bureau, but ideally should be under 36%.
For example, if your joint take-home income is $8,000 a month and you pay $1,000 a month toward debts, that would mean your debt-to-income ratio is 12.5%. Add in a mortgage, and that number changes. In this scenario, a monthly mortgage payment of $1,880 would boost this debt-to-income ratio up to the recommended max of 36%.
If you're not sure, punch your numbers into an online home affordability calculator to get a ballpark idea of how much home you can afford.
What's your credit score?
Your credit score is a number that represents how well you've paid off past debts. And it's really important to lenders because, as they see it, that number shows how likely it is that you'll make your mortgage payments in the future. A low credit score could disqualify you from getting a loan, or it could mean you won't get the best rates. Both you and your partner will have your own credit score; even for married couples, they're not combined.
So how do you check your score? You can get a free copy of your credit report at AnnualCreditReport.com, and pay a small fee for your actual score. As for what number passes muster, a credit score over 700 is ideal. The minimum credit score required for a mortgage among most lenders is around 660.
The good news is that low scores can be fixed: Here are some ways to raise your credit score.
How much money do you have for a down payment?
Ideally, the two of you will be able to put 20% down on a property. That's a big chunk of change: On a $300,000 home, a 20% down payment is $60,000. And don't forget you'll need to pay closing costs, which can be anywhere from 2% to 7% of the purchase price of the home.
So where is all this money going to come from? Your down payment can come from savings, a gift from a family member, or part of a retirement account that you can cash in. (The latter is not ideal and can have tax implications.)
Another option is, you can put down less—some mortgages will accept as little as 3% down—but then you'll be required to pay an extra monthly fee called PMI, or private mortgage insurance.
Who owns (and is paying for) what?
"Prior to signing paperwork, you should talk about who is going to be responsible for how much of the payment," says Lewis. "Are you going to split it 50-50? How much can each of you afford?" Talk about what is going to be comfortable for each of you going forward.
You should also talk about whether both of your names will be on the title, which is the legal document proving you own the property. If you're both contributing to payments, "you absolutely want both people on the title," says Lewis. Otherwise, depending on your marriage status and what state you live in, one of you may not legally co-own the home.
What happens if we break up?
Yeah, we know you don't want to think about it. But in case of a split, you should have a plan in place.
Lewis recommends putting together a contract specifying what would happen to the equity and who is responsible for the payment in case the relationship ends. If one person contributed more to the down payment or pays more of the monthly mortgage payment, will that person retain a bigger share of the equity, or will you split things equally? If you break up, will the house be sold and the proceeds split, or could one partner buy out the other?
Nobody likes to talk about breaking up, but having these conversations before something happens will protect both of you in case things don't work out.

Joe Barbee – ABR,MRP
Broker/Property Manager
Barbee Dream Homes Real Estate Group
478-978-3428
478-919-2145
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What our clients are saying  

Barbee Dream Homes did an excellent job selling our church’s rental home. They work hard to get your home sold. They are great with communication, advice and care about their sellers. I would recommend them without hesitation. If you need your home sold, you can trust them to give all they have on your behalf!

 

~ Craig Ruesch

I have known Joe for around 8 years or more. He has always been a man of integrity and runs his real estate team the same way. It was a no brainer when we went to purchase our home to use Joe & Jenny.

 

~ Michelle Griffin

Joe and Bob had our house closed within a month of getting it on the market. They're super quick about returning calls and messages and really took care of us. They're also laid back, which helps uptight people like me :)

 

~ Melanie Hazen

Joe made my first home buying experience unforgettable!! His dedication, integrity, and honesty are unmatched! The process was smooth and we got what we wanted. When I choose to buy again, the Barbee team will be my resource! Thank you Joe!!

 

~ Crystal Marie

So thankful for the hard work and dedication to get our house sold. They are honest, knowledgeable and great to work with.

 

~ Refuge Church

Awesome source for your real estate needs. Was very easy dealing with and informative.

 

~ Andrew Herndon

The Barbee Dream Team has truly been amazing. Every time I called and wanted to look at something or had a question they were there and available to help us. They have outstanding knowledge and compassion about the job which made this experience so amazing.

 

~ Alex Behling

Joe has been are buying agent for 2 homes. No question he has earned his commission before, during, and after our purchases. Without his hard work we could have never gotten our 2nd house, and on top of that his referrals to various contractors has saved us thousands of dollars.

 

~ James Rivers

The Barbee Dream Homes Team rented our investment property in no time. We are looking forward to investing more money in the Warner Robins area and The Barbee Dream Homes Team will be our exclusive agent. Thanks for a job well done.

 

~ Sandy Camp

Most trustworthy, hardworking, and knowledgeable agents in the middle GA area! I would not go through any other team BUT them! If you worried about who you can trust and who is going to work the hardest for you, let me put your mind at ease and refer you to The Barbee Dream House Team!!! Joe and Jennifer will work their hardest for you!

 

~ Lindsay Thrasher

By far the best agents I've ever used. Great service. They go above and beyond to exceed needs. Very professional and knowledgeable.

 

~ Kathy Jarzynka

We have worked with Joe on several occasions. He recently sold one of our rental houses for us. He was also the one we bought the home from as well as another rental house that we purchased with his help. Joe has always been honest and extremely helpful. I remember one time we were looking at a house and he told us we could look but that he wouldn't let us buy this house because it had too many problems and wasn't worth buying. He was very good at the negotiations and always had our best interest in mind. We recommend he all the time when we hear someone needs a realtor!

 

~ Pam Cliffe

Joe is very honest and hard working. When I purchased my first home he took care of everything made sure my family settled in to a nice house at an affordable price.

 

~ Aaron Meredith

I could not ask for a better Realtor than Joe Barbee. He is the most honest and trustworthy person I have dealt with. He never made us feel pressured to make an offer. It was a GREAT buying experience and we are so happy in our the home he helped us purchase!! He returned every call we made to him and was available ANY time we wanted to view a listing. I will use him again and I recommend him to everyone I know looking to buy or sell.

 

~ Chrissy Todd

Joe always returned my phone calls and emails promptly which was extremely important to me as I had dealt previously with a realtor who was not very responsive. He was very flexible with the times he was available to show me houses. He's very friendly, laid back and approachable.

 

~ Jessica Gaskins

Joe Barbee is our hero! He is very straight-forward about a house's assets and sort-comings and never tried to "sell us ON a house", but instead searched high and low for the perfect home for our needs, desires, and price, so that THE HOUSE sold ITSELF to us. His diligence and dedication continue to amaze us. Our lengthy circumstances presented him with numerous challenges and obstacles in the selling of our home and the purchase of another. But he hung in there with us from start to finish. Every issue that arose was handled quickly and professionally, and usually before we even knew there was a problem! I would definitely recommend Joe Barbee to anyone looking to buy or sell real estate in Middle Georgia. We are extremely satisfied customers.

 

~ Domino Persson

Working with Joe was fantastic. He really took the time to ensure our needs were met. I have never seen anyone work harder to get the job done right and in a timely manner. Plus, his demeanor was so easy going that I truely felt that I was talking to an old friend. I would recommend him, without reservation to anyone in need of his skills.

 

~ Rachel Benton

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