Tough Choices: Should You Buy a Home as a Couple? 

Owning a home as a couple is a no-brainer  - you are family, you will probably have or already have kids, it’s up there in the list of your self-actualisation goals. 

The fact that you are typically bringing in two incomes, or two brains fundamentally, makes the prospects of homeownership even more realistic. And from a purely financial standpoint, owning a home seems like a smart money move for a couple that has decided ‘to do life together’. 

Read Also: Two Parents, One Income: Tips For Families Living on a Single Income

That said, buying a house is inherently a daunting experience. And it can be even more challenging when two people have to make decisions together. You will need to fight through many obstacles to bring your dream to light. You'll both have to make compromises, communicate effectively and align all your goals before entering the market.

With a lot of factors to consider and a complex process to follow, buying a house as a couple will drain your energies, but in the end, you will reminisce with a smile. This article will explore the process of purchasing a home as a couple, how to finance the process, pitfalls to avoid, and everything in between.

Read Also: 5 Investments Types Two-income Couples Should Try

The Process Of Buying A Home As A Couple

Purchasing your own home is a significant landmark for couples looking to take their financial relationship to a higher level. However, before taking the first step, you must understand how the process works and all the necessary steps to take. This step-by-step guide will help you accomplish your dream with little hassle.

Before you decide to own a house as a couple, you should ensure you are on the same page, and all your dreams are aligned. 

Step 1: Evaluate your Budget

The first thing you and your partner need to agree on is a budget and figure out how much you can afford. You should develop a budget to ensure you buy your dream house without affecting your other goals, including retirement and education planning, while also maintaining your current lifestyle.

You should also budget for the future, long after buying a house. Will you afford to maintain the home when one of you loses their income or service debts if you took a loan to finance the process? Failing to make such a plan may jeopardise your dream or lead to property loss.

You should also ensure you can afford all the hidden costs first-time homeowners often forget to budget for. This includes real estate agent fees, closing fees, inspection fees, moving fees, etc., and other expenses you’ll need to budget for in the future, including maintenance and renovations. 

Read Also: The Hidden Costs of Homeownership in Kenya 

Step 2: Decide on The Homeownership Path to Take

There are different homeownership routes to take, and various factors will determine the one you will choose as a couple. Your budget will play a massive part in the process. Other factors include location, your intentions, how quickly you want to complete the process, and if you wish to go into debt or not.

Some homeownership paths to choose from are:

• Buying a ready house
• Constructing a house from scratch
• Taking a mortgage
• Joint Venture
• Buying off-plan properties
• Purchasing Rent-to-Own homes

Step 3: Decide On Financing 

How do you intend to complete your homeownership process? Here are four common ways to fund your home buying process.

Pay in Cash: If you have enough savings and are looking to make the process fast and straightforward, buying a ready house or constructing one from scratch will suit you. These are also two of the most preferred homeownership paths in Kenya.

Liquidate: You can also choose to liquidate some of your assets and use the proceeds to buy a house. Considering that your residential home will probably not generate any income, you should talk to a financial advisor to help understand if this is the best option for you.

Take a Loan: If you and your partner have solid creditworthiness and can raise a down payment, you can qualify for a mortgage loan. A bank or SACCO will help you complete a purchase, and you will repay the money plus interest in monthly instalments. 

You can also take a construction loan if you plan to build your dream house from scratch.

Joint Venture: You can decide to partner with another party to help you buy or build your house. You will pay them rent for a specified period until they recoup their investment and profit. 

If you have a piece of land, you can find a developer who will construct you a house and extra ones for them to sell. 

Read Also: Homeownership Option 5: Joint Venture - All you Need to Know.

Step 4: Find The Perfect Property

Once you have decided how much you want to spend, and figured out how you will raise funds and the path to take, it is time to find a home. Or construct one if you are building from scratch.

You can browse real estate publications online and offline to find properties on sale, walk through the neighbourhood you want to buy in, or hire a real estate agent to help you search for properties.

You must have your finances ready when you start house hunting. And if you are relying on a mortgage, ensure you are pre-approved before heading to the market. Sellers will only give priority to buyers ready to show commitment.

Read Also: How to Get Conned When Buying Land in Kenya

Step 5: Complete the Purchase and Move in

Once you are ready to complete the process, you must follow the steps associated with the specific homeownership path you have chosen. To protect yourself and avoid unnecessary loss, you should hire a real estate agent/lawyer to help you through all the stages. You should also ensure you conduct an inspection and receive an occupancy certificate.

You and your partner will then decide whose name will be on the title. Or if both the names will appear on the title deed certificate. Having both names on the title will render the property a matrimonial home. Meaning both you and your spouse will have equal rights to the land. There are more nuances to property ownership rights that you should be aware of and happy with before proceeding with the purchase. 

Read Also: 9 Reasons Why You Should Own A Home 

Things to Consider Before Buying a House as a Couple 

Collective income: Before buying a house, you and your partner need to ensure you can afford all the expenses that come with it. Will you be able to pay for everything without tapping into your savings, interrupting your income, or worse, driving yourselves into unmanageable debt?

Intentions: Why are you buying a house? Is it for investment purposes or as a part of your retirement planning? If you are buying for retirement, you will need to ensure you purchase in a quiet, peaceful and prime location - or whatever retirement dreams you have for yourself. This may necessitate thinking about the long-term phasing plans of the neighbourhood you are buying or building into. 

Financing Options: Are you planning to save to be able to buy a house outright or take on debt? While taking debt might cause you to pay more in market value when you count the interest, it will free up money to invest in other income-generating vehicles and help you avoid the dead capital phenomenon. Buying with cash on the other hand will give you 100% equity in the property.

Location: Your intentions, budget, and goals will determine where you want to build your home. Will you choose upcountry or your work location? Will you favour a location near your kid's schools or your places of work?

Read Also: Where Should You Own a Home? Upcountry vs. Urban Living

Worst Case Scenario: You should put measures in place to address significant extremities when they happen. What will happen when you separate or divorce? Who will the house go to? In case of divorce, the law dictates that you will share both benefits and liabilities on the matrimonial property. What about natural calamities, do you have enough to purchase homeowners’ insurance? 

Should You Buy a Home as a Couple? 

Buying a home as a couple has both its benefits and risks. Understanding the pros and cons before deciding to purchase together will help you figure out if it is the best route for you and your partner to take.

Advantages

1. Easier to secure a loan, and you can qualify for a higher mortgage with your combined income.
2. Risk and costs are shared between you and your partner.
3. Both of you gain equity and build wealth collectively 
4. You get to strengthen the bond between you and your partner
5. Families are given priority in the government's Affordable Housing Programme (Boma Yangu)

Read Also: Homeownership Option 4: Off-Plan Properties - All You Need to Know

Disadvantages

1. Your partner's credit and other financial histories might affect you
2. Risk of one of you making a loss in case of separation or divorce 
3. You can’t decide to sell the home without the partner’s approval

Pitfalls to Avoid When Buying a House as a Couple 

Not being on the same page: Before you start your buying process as a couple, it is vital you ensure you are on the same page. Changing your minds along the way might lead you to suffer financial losses. 

Not Looking at your financial history: Before you can take such a big financial step, it's important that you look at each other's financial history. Has any of you had a previous foreclosure or declared bankruptcy? Is any of you carrying personal debt that might affect you later? 

Not working as a team: During your property search, you'll encounter a sales agent who will try to appeal to one of your more, especially when they're showing too much interest in a house. You and your partner must put aside your power struggles and work as a team. Listen to each other's concerns and don't shy from making compromises.

Read Also: Yours, Mine, Ours? How Couples Can Manage Money

WRAPPING UP

Buying a home as a couple can be an attractive option. However, before committing to such levels of combining your finances, you should step back and approach it as a business transaction. There are risks involved, and the biggest one is how you will untangle your homeownership stake in the unfortunate event that you have to separate. You should consider involving your attorneys and working out all the issues before you take this massive step.

Finally, you should know when to walk away and regroup. You shouldn't let your relationship be affected by your homebuying process. When you see that you are heading south with a lot of disagreement, you can postpone your plans. Considering homeownership is a long-term investment, you want to avoid mistakes that would cost you in the future.