Buying a House When Baby's on the Way: Look (and Budget) Before You Leap
A lot of things are going to change once your baby arrives, including your budget. As tempting as it is to start shopping for the perfect family home, you should probably take a long, honest look at your finances before you start looking for a new house. When you're thinking about a home for your family, start with this list:
Factor in all the extra expenses
Your parents told you babies are expensive. But, dang. Between the diapers, new furniture, and the tiny, adorable clothes that they grow out of in about five seconds flat, your bundle of joy is already costing you a bundle of money. And he’s not even here yet. Make sure you include those additional expenses in your budget when you’re deciding how much house you can afford, even if you still have a few months worth of baby shower gifts to get by. Children bring other expenses, too. Now that you'll be busier and more tired, the takeout menus on the fridge will be a lot more tempting. You may go out less, but when you do, tack on a pile of extra money for a babysitter. Also? Not to be a buzzkill, but you need to start saving for education, like, yesterday. Make sure your mortgage doesn't take over your world.
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Decide on childcare
Maybe your career is like your first baby: There’s no way you could give it up. Or maybe you’ve always dreamed of staying at home with your kids. Both are completely legitimate and personal decisions. And both come with their share of hurdles and considerations. If you’re staying at home, can you still afford your mortgage with one income? If both parents plan on working, how will childcare costs affect your expenses? Can one or both of you work less, or have a more flexible schedule to save on childcare costs? And don't forget that if one of you leaves the workforce for a significant amount of time, you probably won't be able to command the same salary when you go back. Word from the wise: Even if you aren't working, try to stay active and maintain contacts in your field. You'll be glad you did when you're ready to reenter the workforce.
Decide how much space you need
Babies are small, but they come with a whole lot of stuff. Your parents and friends can help you figure out the balance between getting the space you need and what you can afford. And if you already have a home you love, moving isn’t the only option. Instead, you can look into getting a home equity line of credit (HELOC) and using it to renovate your home. Growing your family can mean growing your home or moving to a larger one, or it may just be time to declutter and reconfigure the space you have.
Was your loan denied because of your pregnancy?
Oh no they didn't. But, yeah, they totally did. In 2014, banks were starting to deny loans to pregnant couples. Their reason? The pregnant partner didn’t have a guaranteed income when she was out on maternity leave. And the banks couldn’t be sure that both parents would continue working after the baby was born. Some couples fought back and used the Fair Housing Act to sue their potential lenders. If your pregnancy is the reason you get turned down for a mortgage loan, it might be time to call a lawyer. Seriously, anyone could quit working at any time, and your choice is nobody's business but your own.
Start thinking about school now
How are the nearby schools in your neighborhood? If you're moving to a new area, what options are available there? Are the public schools open to nearby residents or do you have to enter a lottery? Are local private schools an option? If so, how long is the waiting list and what's the tuition? Though it's impossible to know for sure where you'll want your child to go, it's worth exploring a little, and making sure there are some good school options in your neighborhood.
Whatever you decide, make sure you explore some options and stay realistic. Becoming a parent is a lifelong commitment, and starting off on the right financial foot, in a home your family can enjoy, is a great first step!