Do you know how much his current housing situation is costing him? And is it more, or less, than splitting your current living costs in half would be?
Additionally, if you were NOT contemplating his moving in, would continuing with the status quo finances represent a hardship for you (I’m presuming “no”)? If my presumption is accurate, anything he starts kicking in is going to be a benefit to your bottom line. And so, a rent that represents some discount off his current costs is also going to be a benefit to his bottom line.
I’m not quite sure how to interpret this sentence. Since he’s not paying anything right now (aside from helping out with groceries), wouldn’t I “profit off him” with whatever I charged him? Also, a 50/50 split of monthly costs is more than market rate for rent. A couple years back, a friend of mine moved in with me (he had been renting a room in another house in the same town). He convinced me to give him the same rate he had had before, and his contribution ended up only covering about 20% of my monthly expenses. I think it’s because he was renting a room in a house, and most people who rent rooms out will typically rent out several rooms. But I was only doing this because he was a friend, and was not interested in turning my own home into a business of sorts, so I didn’t rent all the space out.
His current living situation is less than splitting my current living costs in half, but it’s important to note that we’re not really comparing like against like. He is currently renting a bedroom in a house with two other renters. He would be moving into a single-family home where he doesn’t have to share the common areas with anyone else except me.
As for the “financial hardship” question – I think “hardship” would be too strong of a word, but it would be a stretch to say that I’m comfortable. I bought this house with the presumption that I would be responsible for half of the mortgage. I had to take a look at my finances and make some adjustments to my budget to make things easier on me: refinanced the home to make the monthly cost lower, took on a second job (which sounds more significant than it is – I mainly just took it on so I could get a free gym membership, it only makes me about $100 more a month and I’m quitting it soon), canceled my cable subscription, changed my cell phone plan, changed my health insurance plan, and reduced the amount of money that gets put into my 401k each paycheck.
In sense, yes, but not in the way a commercial landlord would.
You’re looking to share expenses as well as a roof. You’re not (presumably) looking at making enough from the arrangement that it would be your primary source of income.
You sort of made my point. Your boyfriend isn’t renting a room in a house, he’d be “renting” half a house. (The “renting” is in scare quotes because you’re not setting up as a commercial landlord would, with the intention of making a profit over and above costs).
Same here - but instead of renting just a room (or maybe two) your boyfriend will be “renting” half the house. So it’s going to cost more than just a room, but he’ll be getting more, too.
By setting it up as a rental situation - however much you two agree on the price or what’s being split and how - as I said, it gives him some rights to be there, but limited rights. You retain full ownership of the asset, but he can’t be abruptly put out on the street due to a misfortune. It will also give you both a bit of a stake in the place for a span of time, after which you can re-evaluate and either continue or make changes.
I’m not quite sure how to interpret this sentence. Since he’s not paying anything right now (aside from helping out with groceries), wouldn’t I “profit off him” with whatever I charged him?
Nope - there’s a difference between you paying less and you making a profit. For example, let’s say I have someone move into my house. My mortgage is very low, and the shared household expenses are around $1000 month. If I charge my roommate $500, I’m paying $500 less than I paid before. But if I charged him half of the going rate for renting a house like mine, he’d be paying $1500 a month and I would be making a profit.,
A 50/50 split is more than market rate for renting a room - but presumably he will not be treated as someone renting a room in someone else’s apartment but instead as a member of your household. In which case the market rate you should be using for comparison is half the rent for a similar house/apartment - which may be more expensive than splitting expenses 50/50.
There is no chance I would put him on the deed. It’s your house. If you aren’t ready to marry him with the assumption that you are going to spend the rest of your days with him, it doesn’t seem wise to give him half of what is likely the most valuable thing you own. Even if you were going to marry him, I still wouldn’t give him half the house. As you know, even well-intentioned loving marriages sometimes end. If you marry him later, get a consultation with a “family law” (i.e., divorce) lawyer in your state about a pre-nup.
I think a fair way to do it is to enter a rental agreement and charge no more than half the market rent for a comparable property plus half of the utilities. For what it’s worth, I wouldn’t sign a year lease. You can have a rental agreement that is month-to-month from the beginning. That way if either of you wants out, just 30 days’ notice would be required. You don’t want to be stuck in a relationship with him because he refuses to move out if the relationship goes south. He doesn’t want you to try to force him to pay up the lease if he leaves for the same reason.
You can charge less and it may be fair to do so for a lot of reasons. Maybe if he had complete freedom to choose, he would prefer a smaller cheaper place with lower utility bills but he’s only living there because of you. Maybe he couldn’t afford to pay half of market rent. Maybe you expect him to do work around the house you would never ask a renter to do (like mowing the lawn or fixing a leaky sink).
When you have to replace the roof or the furnace, that’s your responsibility; not his. It’s still your house.
I would not do this. This seems needlessly complex. Most of her expense in the early years of a mortgage is interest and property taxes. Would you factor in that most of his “contribution” is the same? If he wants to buy half the equity in the house and she wants to sell it to him, they can decide that later.
My personal feeling is that the rent has nothing to do with the mortgage. If her rich Uncle died tomorrow and his will paid off her mortgage, should her boyfriend stop paying rent? If she remortgages the house tomorrow to buy a Ferrari, should his rent increase?
I think they should split food and dry goods, etc. down the middle but each couple seems to make that decision on their own. Kayaker and his significant other seem happy with their arrangement. To each their own on this part.
Yeah, these ones.
This is understating it. If she put him on the deed it is no longer just “her house,” it is “their house.”
Actually, all the rent he paid to her before they were married would be premarital assets, not joint property. The house would also be a premarital asset but (check with a local lawyer here) the increase in equity from paying off the mortgage after they are married would be marital property. If she put him on the title, depending on how she did it, they would jointly own the property in that case but that’s separate from whether or not they marry.
I completely believe you that this happened but it shouldn’t happen this way. I believe that “self help eviction” by locking people of their residence is illegal in all 50 states. The person lived there and was entitled either leave voluntarily (with their things) or to benefit from the eviction process.
Very good advice.
Taking on the loan is actually separate from getting an interest on the title. It’s not automatic. Naturally, if wind defaults on the mortgage and the house is foreclosed, he loses his interest in the property too.
I think this is the exactly wrong way to do it. If he buys a $2000 water heater, does that get him $2000 in equity in the house? If he moves out five years later and you sell ten years late, how much does he get? If he moves out a year later, can he demand the $2000 back? What if you can’t pay it? Can he force you to sell the house? What if you just want to pay the $2000 and never give him equity he wants to buy? What if he wants to add a porch that you don’t want; should he get equity for that? If he has $2000 in equity in the house, does he start paying a pro-rata portion of the mortgage and property taxes too? This idea is a nightmare. Kayaker mentions something like this working for him but that’s because his relationship worked out. If it hadn’t, he might have a very different opinion of this idea.
My spouse and I had an agreement when I first moved into her house. I started paying half of everything, but we considered it to be like rent to start with. We discussed having my contributions essentially “vest” over time. So, at the beginning, it was rent. A couple of years in, if we split up, we’d consider my contributions to be partially vested as equity. And a few years after that, fully vested as part of the equity in the house. I put in a lot of work on some DIY projects as well. This is in part because if I had not moved into her house, I’d have bought my own house at that time.
Now we’ve been together for 15 years, I make more money and she hasn’t worked full time for a while. Our finances are more intertwined, etc., so when we refinanced the mortgage some years ago, I was put on the deed.
This is another case where this worked because the relationship worked. In that case, no harm no foul. But what if you had split up during the vesting and she didn’t agree with how much vested interest you had in the property? How would you have enforced your rights? Under the statute of frauds, you can’t convey an interest in real property except in writing.
I can’t actually remember now if there was no writing, or if there was something in writing.
It was a risk, but a calculated one. We had both been in long term relationships before, and had a sense of how we behaved in breakups, and how we each might behave in the future.
If the two of you can’t talk exit strategy you’re not ready. How much notice to move? Who gets what? Who pays for what? How much leeway time to get out! Will you buy things together? Or you buy a tv, I’ll buy a game console?
Whatever rent/board arrangement you make, and, whatever exit strategy you agree upon, should be formalized in writing, at least. Notarized even better.
Having both been through recent divorces the idea should appeal to you both.
I was thinking of that as an initial agreement, but you’re right about the mortgage, BF gains no equity, he should pay a fair share of reasonable living expenses, not something based on the mortgage.
Here is what I would do. YMMV. I would work out what part of my mortgage payments is interest and what part is amortization. Your mortgage company can tell you that. In fact you can ask them for an amortization schedule since this will change with time (interest heads to 0 as you get closer to term). Then I would ask him to pay 50% of the interest, taxes, insurance, etc. and adjust the amount yearly to reflect changes. If at any time, he has enough to buy in to your equity and you are comfortable that your arrangements are premanent, then can contemplate adding him to the deed.
Tying rent to mortgage is a bad idea IMHO. I’ve rented places where the owner charged their mortgage payment as the monthly rent (always higher than FMV rent for the area) and my attitude is if I’m not getting the benefit of the growing equity then why should I be paying your mortgage? I understand with the OP it’s more than just renting a room so I would suggest finding what the market rent would be on your place and charge him half of that.
I agree it shouldn’t happen that way, but it can and does. From what I’ve seen the problems start when a person can’t prove they are a legal resident of a property. The quickest way to do that when you don’t have ownership is your name on a lease. You don’t own a part of the house and you don’t have a rental agreement? Then how do you prove you live there? Good luck with that. Especially if the other side already has a lawyer working for them and you’re playing catch-up.
The wealthier you are the easier such proof would be (the more money the more paper trails there tend to be, as well as easier access to legal help), and there are strategies such as having your name on the utility bills, but the quickest and surest way to prove residence is a lease/rental agreement. Now, I did have a 20-year verbal agreement to rent from one of my old landlords and we all know that verbal agreements are worth the paper they’re written on, but we started that relationship with a standard 1-year written lease renewed twice before we went to verbal month-to-month. And when we fell on hard financial times and I needed to prove my residence to get things like food stamps we (landlord, spouse, and I) drew up a new copy of the old lease and signed it to provide that documentation. So all sorts of rental arrangements are possible, but even in the most congenial circumstances having things written down can be very valuable, keeps honest people honest, avoids misunderstandings, and can protect the interests of all parties involved, including providing legal documentation of residence and interests.
On the flip side, I’ve know instances of two people where one is not on the lease, the bills, or anything and doesn’t even pay rent who, when the paying partner attempts to have them removed from the place is told that regardless of whose paying (or not paying) the bills the person is de facto also a legal resident of that address. This can turn into a legal mess and in the most recent instance (a neighbor in my current building) this resulted in both people having to move when the landlord, fed up with the whole mess, refused to offer a lease to either party.
Which is sort of an argument for a month-to-month arrangement, although those two were in a 10 year relationship that went sour in year 8 or 9. Which happens. Breakups are frequently messy.
Commonly, your driver’s license and all the mail you get at the house. I understand that laws are broken. Again, I realize this happened in fact. I’m just saying that the person should not just have been locked out of their home and a lease in that case would only have been another paper protection. The person taking the illegal action still might have done so regardless of the lease.
Eh, I could be a dog. Take my opinion for all its worth under the circumstances. I promise you I am not your lawyer or the OP’s.
Doing any kind of quitclaim, when you have a mortgage, might trigger your mortgage’s due-on-sale clause - another reason to not add him to the deed.
If you do add him (certain of long-term commitment etc.) then you might have to refinance. Rates are insanely low at the moment, so that might not be a bad thing, but do think very, very seriously about the risks of joint ownership with someone with whom you have no other contractual obligation.
Whatever you do re sharing expenses, you could do a lot of crunching trying to equalize relative costs. For example, if you’re the only one on the mortgage, you’re the only one getting a tax deduction, which effectively lowers your cost.
Not everyone owns a driver’s license or government issued ID. This is an on-going issue with some impoverished areas. Likewise, people are getting less and less mail these days.
So… elderly woman without a driver’s license (I’m not entirely sure but I think she might have stopped driving for medical reasons) has been living a couple decades with her boyfriend, who rents the house in his name and pays all the bills so there are no bills in GF’s name and her name is not on the lease (apparently she gave him money - cash - towards these bills). Her family is gone, so she gets no mail. He dies. His family shows up, calls her a gold-digging whore, and locks her out of the house. She calls the police but she can’t prove she lives there. The landlord states that she has been living there for years, even if not on the lease. Also, the landlord is pissed that BF’s family changed the locks on his property. And it from there it got ugly.
Bottom line - she couldn’t prove she lived there. She couldn’t prove she had a legal residence at all.
If you’re wondering - I worked for the landlord at the time, and in fact, was in the middle of repainting the house they were renting when all this went down. I was a bit surprised - I thought they were married, and in fact the GF used the name "Mrs. HerFirstName HisLastName as if they were married, the couple said they were married - but she didn’t have that bit of legal paper, either. And my state does not recognize common law marriages unless they were in existence prior to 1958. Oddly enough, it does recognize co-habitation and has something called a “co-habitation agreement” which is touched on here. GF didn’t have one of those, either.
True, that case was an outlier, but it’s an example of where, even if the relationship is solid and lasting there can be still be a trainwreck.
Speaking of what happens to BF when the OP dies, couldn’t she put in her will that her boyfriend can stay in the house until probate is finalized? Or for that matter any length of time after her death? Then if he has a copy of her will … well there you go.