After all the butterfly-inducing crushes and story-worthy dates, you found the love of your life.
However, following the excitement of engagement comes wedding planning. And you might face a decision: Throw a lavish wedding to celebrate your forever person? Or put those funds toward a forever home?
While TV shows may make it seem like you can’t have it all, with smart saving, plenty of planning and the right mortgage loan, you can kick off your marriage and homeowning journey with a bottle-popping-worthy celebration.
From venues to outfits, food and décor, weddings can quickly add up to tens of thousands of dollars. But the typical price of a big day decreased drastically in 2020 as couples who got hitched pared down guest lists and opted for hometown gatherings and backyard festivities — proving you don’t need to rack up wildly high bills to have an amazing day. Couples who want to plan weddings on a budget may look to those from 2020 for inspiration on throwing “mini-monies,” virtual ceremonies or otherwise lower-key celebrations.
Down payment reduction
When you think of a down payment, it’s likely that 20% of a home’s price comes to mind — a hefty sum to pay at once. But contrary to the popularreal estate misconception, a 20% down payment isn’t always required to buy a home and you have options to explore.
For example, those who qualify for a HomeReady mortgage from Ally Home can purchase a home with a down payment as low as 3% — making the dream of throwing a wedding and buying a house in the same timeframe more of a possibility. Think of it this way: A 20% down payment on a $200,000 home is $40,000, but a 3% payment cuts that to just $6,000.
White picket fence or white dress?
You have a good idea of how much goes into a wedding compared to a home down payment. But if you’re trying to choose between one or the other, it’s important to consider a few factors besides dollar figures alone.
If you go with the wedding:
It’s a one-time, fixed cost
You’ll make special memories with friends and family
You might receive financial assistance from family
You may opt out of gifts and ask for cash instead (to put toward your home later on!)
You won’t see a return on the money you put into it
If you go with the mortgage:
You’ll have the down payment plus the long-term financial responsibility of a mortgage
You may be able to make a larger down payment — saving on interest in the long run and scoring lower monthly payments
You can still get married without a lavish ceremony (and perhaps throw a party down the road)
Your home will likely appreciate over time, making it a valuable asset you could earn a return on
Have your wedding cake and a home to eat it in, too
As the saying goes, you only live once. If throwing a wedding and buying a home are meaningful experiences you want to have, you don’t necessarily have to make it an either/or situation. While you might need to make some concessions, like having a smaller wedding or putting off your home journey for a few extra months, you can do both by being strategic (and tag-teaming the savings effort).
The key to achieving multiple savings goals is organization and prioritization, which can be done with an Ally Bank Online Savings Account. Our tools let you divvy up your savings into virtual envelopes called buckets, where you can set individual dollar amount targets and timelines. Then you can put a savings plan into action.
Here’s an example: Say you hope to get married in two years and buy a home in three. You and your partner can save $800 a month — putting $500 in your wedding bucket and the remaining cash in your down payment fund until you reach your wedding date. Then, you add the $500 to your home bucket, bringing your down payment savings to a total of $800 a month. In the end, you’ll have saved $12,000 for a wedding and nearly $17,000 for your down payment.
“I do” meets “I’m a homeowner”
You shouldn’t have to choose between marriage or a mortgage. If both are goals you and your partner care about when building your future together, know you have options to make it work. Whether you choose a mortgage with flexible down payment options, take extra time to save, downsize your wedding or a combo of all three, you can walk down the aisle and up to a home of your own as well.