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Should newlyweds buy a house?

So you've returned those well-meant-but-weird gifts, sent the thank you notes and settled into your newly married life.

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If you're like many freshly minted couples, now you're thinking about buying a home of your own -- with plenty of storage space for the wedding gifts you actually kept.

But how do you know if you can afford to be homeowners? Is it wise to buy a home before the ink dries on your marriage certificate? What are some of the common mistakes newlyweds make when buying their first home?

Don Patrick, a Certified Financial Planner with Integrated Financial Group in Atlanta, is a big fan of couples becoming homeowners. However, he's cautious about recommending such a big investment for pairs just starting their married lives together.

"While having a home of your own is certainly rewarding," he says, "many young couples are swept up in the romance of their new life and forget that buying a home is a huge financial commitment." 

Allyson Bernard, a veteran Realtor with Real Estate Professionals of Danbury, Conn., agrees. She works carefully with newly married clients to ensure that they've given attention to other financial commitments in their life (paying down student loan debt, cleaning up credit card debt, etc.), and that they're not buying more house than they can comfortably afford.

"I want my clients to be happy in their new homes, not to lose their houses in two or three years because they weren't really prepared to be homeowners," she says.

Buying a home
Here are some things you can do to make sure your homeownership experience ends up "happily ever after."
 
7 key points
1. Clean up your financial house.
2. Resist the urge to splurge.
3. Manage your moves.
4. Get pre-approved before house-love hits.
5. Research mortgage deals.
6. Discuss your timeline.
7. Think twice about becoming a landlord.

1. Clean up your financial house.
Before you take on a mortgage, eliminate as many other financial commitments as you can. Pay off leftover wedding or honeymoon bills or credit card debt. Pay down or even pay off car loans. Take a close look at your student loan debt and any old debts either of you brought into the marriage.

Patrick's rule of thumb: A couple's total monthly debt -- including their new house payment -- should not be more than 35 percent of their gross income.

You should also pull copies of both of your credit reports to see where you stand. You can learn how to get and read your free credit reports on Bankrate.com. Your credit ratings will make a big difference in your mortgage interest rate and, therefore, your monthly house payment.

Finally, get life and disability insurance for each of you. Life insurance, particularly, is cheap these days. If your employer doesn't offer it, or doesn't offer much, consider individual policies. If something tragic should happen to one of you, the insurance can help pay down -- or completely pay for -- your new home.

 
 
Next: "Mortgage lenders don't like seeing new debt on your credit report."
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