Marriage or Mortgage - Why not have both?

Netflix’s newest reality hit, Marriage or Mortgage, showcases couples having to choose between two of most peoples’ biggest milestones and financial transactions – a mortgage and a wedding. The show has left many people pondering how to spend their hard-earned savings: on a down payment for a home or the ‘instragrammable’ wedding of their dreams.

The show takes place in Nashville, Tennessee, which has a notoriously hot housing market. Filmed prior to the COVID-19 pandemic, Marriage or Mortgage follows ten couples as a Realtor and a wedding planner each try to persuade the couples to either spend their savings on a beautiful wedding or a down payment for their first home. The show highlights the reality that many millennials grapple with in an interesting and relevant way, touching on the unique culmination of when emotional anxiety meets financial reality.

As with most hit Netflix shows, Marriage or Mortgage created quite a frenzy on social media with thousands of viewers voicing strong opinions about what choice the couples should make. It created an outrage amongst many viewers about the seemingly irresponsible financial decision to choose the wedding, arguing that the mortgage is a no-brainer given the investment potential. Even though it is widely understood that owning a home is the most steady and safest way to build generational wealth, a wedding is a big deal too, so it’s hard to imagine skimping for the safe and steady long-term play.

It is no secret that weddings are expensive. In 2019, the average wedding cost $28,000 which would be a solid down payment for a first home, hence the inspiration for the show. Millennials and younger generations have more debt than generations prior, arguably making it more difficult to save money in general – let alone to save for two large expenditures at once. With more debt and higher wedding expenses, more couples are turning to credit to finance their big day. In fact, 36% of couples go into debt to pay for at least some portion of their wedding.

This leaves many couples wondering how they are going to finance a wedding and a home. But we are here to tell you it is possible to have both! You can have your cake and eat it to – it may just be a smaller cake.

Saving for a down payment is the single largest perceived barrier to homeownership. So, while it’s great to have a large down payment, the average for first time home buyers is around 6% of the purchase price, and there are loan options that require as little as 3.5% – 0% down depending on the borrower’s specific financial situation. A reasonable down payment coupled with historically low interest rates makes homeownership more accessible than many realize.

The median home price in the US in 2020 was $272,500 which puts a 6% down payment at $16,350. Given the budgets of the couples in the show (around $30,000), this leaves a significant amount of money to pay for a lovely wedding even after a mortgage is secured. Despite these being national averages, they are consistent with our local Michigan market as well as many others.

For weddings, it’s important to consider that although the average cost is close to $30,000, it certainly is possible to do it for less. One cultural shift of the COIVD-19 pandemic was the advent of what wedding website, The Knot calls a “minimony.” Due to capacity limitations, many people held smaller, more intimate weddings, significantly driving down the cost. In fact, the average wedding in 2020 cost $19,000! While everyone has their own expectations of what a wedding should be, we certainly aren’t mad about the focus on more economically friendly “minimonies” and “micro-weddings.”

Additionally, it is important to note that an increasing number of savvy consumers are buying a home prior to getting married, especially for those getting married later in life. In this case, a cash out refinance may be a great way to get the best of both worlds. Historically high home prices coupled with low rates are giving many Americans access to the wealth they have earned through real estate.

While watching Marriage or Mortgage may leave you thinking which you’d choose, in reality you shouldn’t have to.

Interested in learning more about loan and down payment options? Reach out to us today!