What comes first: House or marriage?

Low mortgage interest rates have some couples planning a home purchase before a wedding.

By MSN Real Estate partner Feb 14, 2014 11:10AM

 © Jose Luis Pelaez Inc, Blend Images, CorbisBy Christin Camacho, Redfin

 

Redfin agents have noticed a trend lately; couples are putting off their wedding so that they can buy a home. The reason? Low mortgage interest rates. These practical pairs haven't given up on the idea of marriage; they just can't afford to buy a home and pay for a wedding at the same time, and interest rates are too enticing right now.

 

David Pollock, a real estate agent at Redfin, experienced this personally.

 

"I bought my house with my girlfriend in October. We will get engaged eventually, but I told her I'd rather spend the money on a house right now. I've had three clients who have made the same decision; they want to lock in a good loan now while interest rates are low," Pollack said.

 

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So are these couples making the right decision? Redfin decided to look at what couples could miss out on financially if they put off buying a home to have a wedding, or if you want to look at it the other way, what they gain financially if they forgo the wedding and buy a home.

First of all, we gathered some wedding statistics:

  • According to The Knot, the average wedding costs $28,427, not including the honeymoon or wedding bands
  • The Knot says wedding bands cost $1,126 for brides and $491 for grooms on average
  • The average newly married couple spends $5,111 on their honeymoon trip, according to a Conde Nast Bridal Infobank survey (cited on Bankrate.com)

Altogether, that's about $35,000. If a couple instead used that $35,000 on a 20 percent down payment for a $175,000 home, over the course of five years the home would gain nearly $47,000 in equity, assuming an appreciation rate of 3 percent.

Redfin

So if a couple spends its savings on a wedding and has to start over from scratch to save for a down payment, it could be losing out on nearly $47,000 over the course of five years.

 

It's not just the low mortgage interest rates that are pressuring people to buy now. The stricter mortgage lending regulations have some couples worried about qualifying for a loan while spending money on a wedding.

"I have one client – a couple – who put off their marriage so they could buy a home," said Jordan Clarke, a Redfin agent in San Diego. "They've been making some plans for a wedding, but can't put down the reservation fee for their venue until they've secured their mortgage, otherwise it could affect their credit score and would prevent them from qualifying for the loan. They're going to wait to get married until later this year."

 

Of course not all couples are in the same financial situation; there are some who don't have to choose between a wedding and a home; the low mortgage interest rates are allowing them to do both.

"I've seen a few couples who are engaged and planning their wedding while looking for homes. They wouldn't be able to afford to do both if it wasn't for the low interest rates right now," said Sylva Khayalian, a Redfin agent in Pasadena, Calif.

 

Couples who are looking for a home should check out the advice from Redfin agents and relationship expert Andrea Syrtash on what to do to avoid love and real estate conundrums: "On Love and Real Estate: 5 Ways To Lose Your Mate."

 

More from Redfin 

 

 
26Comments
Mar 11, 2014 7:32AM
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BAD BAD BAD idea ... much easier to break off an engagement than have to go through the pain of dividing an asset (the house) if you purchase one before marriage and end up breaking up. there is no way i'd buy a house w/ a bf or even a fiance w/o getting married first. interest rates be damned !

 

i got married for $10k almost 7 years ago. i think our bands TOTAL cost about $1k, not $1600 and we certainly did not go on a $6k honeymoon (try $1000 for a midweek jaunt to south shore tahoe). it's possible to get married THEN buy the house. then again, in the areas where you can buy a house for $175k, you can have a wedding for alot less than $35k w/ every bell and whistle. its the places where a wedding costs $35k that you CANNOT get a $175k condo even ....

Mar 11, 2014 5:22AM
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Poor choice committing to a home before committing to each other because of money. You can see the Justice of the Peace and get married. As for the rings they are symbols ad size does not matter, don't spend/waste thousands trying to impress others. Starting a home financially secure is more important/impressive.  We see what happened to this country when the masses of people bought and lived over their means. They are both big commitments but committing to each other is paramount. In my opinion big expensive ceremonies are for show and a nice honeymoon is more important if it can be afforded.
Mar 11, 2014 3:14AM
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Unless only one person can afford the house by themselves, don't buy a home with a "soon to be spouse".  At least hit the justice of the peace, make it legal, buy the home, then just the ceremonial **** at another date.
Feb 17, 2014 5:37AM
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"Buy the dip" and lock in a low mortgage rate soon, and while home prices are finally trending up! Unless you're a veteran or qualify for a USDA loan, you can make as little as a 3.5% down payment (and that can even come from a "gift" from a relative).


It's 2014. Let's face it. Couples are living together before marriage. Buy the dip, move into the home together, and make sure the relationship is right all at the same time. Rates have increased a little, but a little shopping can mitigate that. Post your loan scenario to RateBid.com. The form only takes about 30 seconds to complete, requires no sensitive information, and then the site distributes the data to over 100 lenders across the country. The lenders that believe they can approve the scenario and want your business will "bid" their rates and fees against each other, often resulting in entertaining "bidding wars" between lenders as they lower their rates and fees with management approval due to fierce competition on the site. The potential borrower who made the request remains anonymous so the end result is that borrowers are able to quickly "zero in" on the lenders with the best rates that believe they can approve a given scenario, without ever receiving a sales call. There is no "winning bidder", so the borrower may contact as many of the bidding lenders as desired, after reviewing each lender's rates, fees, experience, website, bio, and feedback rating(s).

Feb 14, 2014 2:52PM
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I purchased our home in July and getting married in March.  The market was right and the home was my priority.  Our wedding is going to be a small one with family and friends, 4k was our max budget.  If I had my way, it would have been city hall, but there are one's parents to consider. 
Feb 14, 2014 2:49PM
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Here's a tip -  go to the courthouse and make it legal.
Feb 14, 2014 2:29PM
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Seems to me that most the money is wasted on a fairy tale that only last a few days, buy the house and be practical with your resources. It seems that you can pay for several extremely fine vacations for what is wasted on a "honeymoon" over quite a few years. That would seem more like having a honeymoon every year for a decade, each hopefully better than the one previously enjoyed.
Feb 14, 2014 2:25PM
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Don't blow all of your money on a party. Keep it simple and start your financial future together. Bad finances will ruin your marriage anyway.
Feb 14, 2014 2:12PM
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My husband and I got married before we bought a house. However, we opted not to have a wedding, and the money we saved went towards buying our house. An overpriced (in my opinion) single-day party vs. a permanent roof over our head? We both think we made the right decision.
Feb 14, 2014 1:55PM
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Yeah and you might find you don't even want to get married, and that could really cost you, so which is better having a house or the woman or does it all work better in a package? I think either way the guy gets screwed in more ways than one. Lonely is better than broke, mad and lonely!
Feb 14, 2014 1:51PM
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I'm one of these 'types', I suppose. They are sort of generalizing on the reasons and I think it's situational.

 

For me and my fiance, it made sense to buy a home first. I spent a lot of time after the crash watching the market for the bottom. I hit the bottom in my area perfectly. If I sold today, I'd walk away covered on every penny spent thus far and more (profit.)


We're currently planning a honeymoon 3-4 times the value quoted in the article, and a wedding that costs half. Our priorities are different I suppose. Every one of our friends who spent 30k+ on weddings (and then went to disneyland for the honeymoon) regretted it. After 2 weeks in Hawaii and 2 weeks traveling Europe, a one-night party (reception) will still be just as fun (because it's the people, not the linens/flowers/place that makes it fun) and the experiences we share on the honeymoon will be hard to repeat when our traveling group (family) grows in the  years to come.

 

Priorities my friends. For some, pulling up to a cardboard box with a 100k car is the beezneez. To each their own.

Feb 14, 2014 1:44PM
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You can't count on a home to appreciate in 5 years.  Thats housing bubble thinking.  Plan on seeing appreciation in 10 - 30 years.
Feb 14, 2014 1:32PM
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There's another good reason to wait...
Guys, you need to buy the home you plan to live in first, then get married and place the home as off-limits to any divorce.  If not... you may find yourself living in your car when she dumps you for the next guy.
Feb 14, 2014 1:27PM
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Does this advise work if the couple is 2 men.  I want to buy a house with by big hairy leather daddy!
Feb 14, 2014 1:14PM
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Men, buy the house FIRST,  get married later.    Then it probably won't go to the wife if she divorces you.
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