I live in southwestern Ohio. I have been renting a 2 bedroom split-level house with my boyfriend for the past 3 years. (I do not want to put my boyfriend on the deed.)
My half of the rent is $275 a month, and I pay half of all utilities. I work part-time for minimum wage. Years ago, I tried to get a loan for the purchase of a vehicle, and I know that the bank is really only interested in what you can prove you can pay. So, I’ll have to swing the loan on my income, because even if I tell the bank that he is going with me, their answer will be, “Well, yes, but what if he moves out?”
Since my half will drop from $275 to $150 a month, the extra $125 a month should cover any increase in utilities, and possibly allow me to make extra payments on the principal and pay it off quickly.
Honestly, I’m all about owning my own home. It’s a good feeling. But if you were my very own Why Child, I would discourage dreams of home ownership right this very minute. You likely can make the payments, and pay the utilities, but can you afford the taxes and the maintenance? Even something relatively minor like needing a new water heater would severely strain the budget you’re working with. And then there’s the major stuff: wiring, roof, furnace, etc. At very minimum, I’d say that you should at least be working full time before trying to make the purchase. (And that’s assuming that you can get financing with your current income.)
Getting a mortgage at a decent interest rate could be tricky. I’d definitely start by shopping for a bank or credit union that is willing to lend you money. Until you know how much you can borrow and at what rate, there is no step two.
The good news is that my boyfriend can do a lot of whatever repairs may be necessary. He works in HVAC, and with the permission of our landlord, installed a new water heater in the house we are renting, and made a few adjustments to the furnace, insulation, and AC to make them more efficient. I think my biggest worries would be faulty roof or septic system. (He’s done roofing, but he hates it.)
The house we are renting was not furnished, so we have bought all the major appliances.
There is more than the $25,000 - I have an additional $10,000 marked “Emergency Use ONLY.” I was not planning on hiring a moving company, but may rent a trailer to put behind the pick-up.
And yes, I am cheap. I had to make a choice between the cable box or the internet, and Nat Geo Wild won. (Well, I love Chiller, too.) So I drive about a half mile to the local library to use their computers. They’re closing now, and closed on Sunday, but I’m off Monday, so if I don’t respond to any questions or comments for a couple days - that’s why.
Even having your boyfriend helping you pay for your house, you sound very light on income to think about owning a house. Also, having your live-in boyfriend of many years helping you pay for your mortgage could get complicated even if he isn’t on the title for the house - after paying for half of it for years, I think he might have a good case for suing for half the equity if you broke up even without being on the title. Also, I can’t help but wonder why you want him to pay for half of everything without sharing in the equity of owning a home - that doesn’t sound like a great deal for him.
Did you save the $35K or was it a windfall? If you can save $35K on part-time minimum wage, do whatever. You need to be giving advice, not soliciting it.
If it was a windfall, you need to think about what you are doing. If you put your money in the form of a house, it’s not “gone”, but it’s much harder to get to. This is especially true in places with severely depressed real estate markets: the reason houses sell for $45K is that there isn’t much buying or selling going on, so if you do want/need to sell the house, it could take months or years.
This can be good or bad. It’s bad if:
You want to move, especially if you want to move in a hurry.
You decide there’s something else–like a college education–that you want to invest in.
However, it can also be good:
If you are lousy with money, this can be a way to basically force yourself to save. Your “savings” are the equity in the house.
If you are good with money, and have an erratic, emergency prone family. I know people who, if they knew their sister/mother/bff had $35K in cash money, would simply never stop hounding them. They’d call them with every flat tire and root canal and plumbing disaster etc. It can be surprisingly hard to withstand this type of pressure because the sort of people that do this know all about guilt trips. Also, they will blow their rent and grocery money on stupid shit and then show up on your door talking about their kids being hungry and homeless. But if they hadn’t had you to fall back on, they wouldn’t have blown their own money. But if you have 50% equity in a cheap house, your shockingly low housing cost is less noticeable, and you don’t come under the same pressure. And that low housing cost leaves a lot more of your monthly income free for things like tuition.
Where do you see yourself in five years? Do you expect to live in the same town? Do you expect your income to increase?
Remember that if she is putting down 50% of the purchasing price, it’ll be a long time before he’s built much equity. And he will benefit from paying 1/2 of very low payments because of that huge down payment: basically, as a renter from her, he’s getting housing at a huge discount.
Have you thought of looking for a Buyer’s Agent? (I think that’s what they’re called.) They are working for you, not also the seller. Because yes, realtors also have a stake in the seller’s getting price as their commission is based on that.
The first thing to do is visit a bank and get pre-approval. No need getting your hopes up if you can’t get the loan. I’m fairly certain full time employment is in the approval criteria, while the large down payment may help change an underwriter’s mind - but I wouldn’t count on it. Make sure you can get the financing before looking. After that, sign up with a real estate agent who will help you find properties. I recently had a friend start looking at properties and get surprised/disappointed he had to have full time employment to qualify. I told him all he had to do was mention it and I could have told him not to bother. (former loan processor)
You’ll (the OP) want a written agreement specifying what rights your boyfriend has in the event of a breakup. As a general rule, unmarried cohabiting partners have no rights to real property unless they are on the deed or mortgage, but you may wish to consult a real estate attorney licensed in Ohio to confirm this is the rule in your state. They’ll usually offer brief free consultations where you get the answers to simple questions like these.
The only likely issue I see here is that he might be entitled to a lien for the value of any work he does on the home in the event that you break up.
That seems likely; however, as a frequent watcher of “Judge Judy,” this sounds like a lot of the cases she has in front of her - people co-habiting, they break up, things get ugly, people sue other people for things they think they deserve.
That sounds like a very good idea. It might not be a lot of money in the long run (if the house itself is only worth $50,000 or so), but it could save a lot of hassle if things are spelled out clearly in writing from Day One.
I haven’t read the whole thread so I’m sorry if I repeat some things.
One of the first things is you are going to have a hard time finding a lender who will give a mortgage for under $75,000 let alone one who will do under $50,000.
One of the reasons is that they won’t make much money on it and your rate will probably be higher because of it. Another reason is laws about the cost of obtaining a mortgage can’t be more than a certain percent of the mortgage amount. Some of the costs are fixed and can’t be lowered.
If you go out to Zillow there is a place where you can put in the zip code of where you want to buy, your credit score, and how much you want to borrow along with other information and it will bring up a list of lenders that meet your criteria.
If you are a first time home buyer look for programs in the town/county/state where you want to buy that help first time buyers. They will have income ranges and credit ranges, that you will have to meet and you usually have to attend some classes but they will walk you through the steps and some of the programs will help with the down payment and closing costs. Don’t count on the realtor to know, they may know of some but not all the programs.
As far as your bf helping. I’ve known couples in that situation who have broken up and ended up in court over the house. In each case the court ruled in favor of the home owner saying that the other party would have had to pay rent anyway. However, I wouldn’t count on that happening and I’d get everything in writing. If I was talking to your bf I’d tell him to be careful how much he puts in to the house and keep receipts for anything he buys and any improvements he makes. I’ve known a few people who put a lot of money (tens of thousands) into the SOs home and didn’t get anything back after the breakup.
Make a list of what you want and won’t compromise on.
Make a list of deal breakers.
Keep that list so you don’t fall in love with and buy a house that doesn’t meet your criteria. You can’t return a house if you find out after you move in that you really needed off street parking or an extra bedroom.
Check out the HOA if there is one. I’ve known people to buy houses only to find out later that they can’t have a dog over so many pounds or park a company vehicle in their driveway. Having to park your work truck on the main road and walk 4 or 5 blocks to your house gets real old real quick when it’s hot or icy outside. You don’t want to find out after you buy the house that you can’t bring your lab because no dogs over 20 pounds are allowed.
Make sure you can live with their rules.
Realize too, that any broker or agent you use won’t be making much on this sale and there will be plenty who won’t even want to bother helping you. Don’t give up, keep looking.
One thing I thought of yesterday - is it possible to have a co-signer for a home loan? I know you can for a car, but what about a house? If the banks are not likely to finance someone with a part-time job, is this an option?
To be honest, I don’t think he’ll be there for years. This is one of the reasons I am holding fast to the $300 a month amount - it is what I know I can afford on my own. Without getting too heavily into this subject, he’s a bit of a control freak, and he drinks too much. Once, sometimes twice a month, from a sitting position on the kitchen floor, he informs me that he is going to move out. This has been happening since the first week we lived together. One of these times, I’ll take him up on it.
As far as why I want him to pay half of everything, simply because he’ll be living there. $150 a month plus half of the utilities is incredibly cheap rent, anywhere. Why wouldn’t he pay rent? It’s still $125 a month less than he’s paying now. If/when he does move out, I will find a roommate, and I would expect them to pay rent, too.
I think it’s a very good deal for him. For instance: We have a one and a half car garage where we rent now. When we moved in, I basically gave over the use of it to him to house all of his tools and a 50 year old pick-up he is going to restore, “someday.” Any house I would buy would have to have a garage that I would have to let him use, and he wouldn’t be able to rent a storage shed that big for $150 a month!
*Before anyone asks, I would have to let him use it because it’s just not worth the argument.
It’s from an inheritance. I think it would make my mother happy to know that I had the security of owning my own home.
Within five years I will probably be in the same town.
I would not expect my income to increase without changing jobs. After reading the answers I have received, I am now on the fence about this. I work an average of 35 hrs a week at my current job. I had thought that over a year of employment would weigh in on the “job history” part of the loan application, but I am beginning to think that 3 months employment at a full-time job might look better.
What if I pick up another part-time job? That way I keep my job history and still increase my income. My manager has said that she is willing to be flexible with my schedule - to the extent of working around another job without a loss of hours.
No, but I will.
Oh, crap. NOT in the sense that your answer is crap, but in the sense that this is turning into all kinds of things that I had not foreseen. In all the years since I moved out of my parents’ house, I’ve had people rent a room from me, and I’ve rented rooms from people, and never once signed anything. I’d have never thought of this. (Oh boy, Judge Judy here I come! :eek: )
Your instinct to not put him on the deed is a good one - as you have said, him threatening to move out regularly is not a sign of a healthy longterm relationship.
In my opinion, and you can take it for what it’s worth, of course, you’d be better off with a roommate helping you out with your mortgage than this boyfriend (with a written rental agreement and deposits and such).
In 99% of living arrangements, this sort of thing never comes up. It’s the 1% that you don’t plan for. I wouldn’t worry about it too much. You don’t need a family law attorney to draw up a proposed division of assets plan or something. You just want something in writing (preferably notarized) which spells out your expectations.
Which he has also signed, indicating that he knows what is going on as well. People conveniently “forget” all kinds of things they agreed to once it becomes inconvenient for them to remember. Putting things in writing (and having them signed by all parties and notarized) makes it clear that everyone is on the same page.
I think your idea of speaking with a realtor is correct. When I bought my home in South Boston, I used Capital Residential Group. They had a network of mortgage lenders whom they have relationships with that were able to pre-approve me for a loan quickly. They were also able to advise me on the terms of the loan and what would be within my price range.
And yes, I am cheap. I had to make a choice between the cable box or the internet, and Nat Geo Wild won. (Well, I love Chiller, too.) So I drive about a half mile to the local library to use their computers. They’re closing now, and closed on Sunday, but I’m off Monday, so if I don’t respond to any questions or comments for a couple days - that’s why.
As far as why I want him to pay half of everything, simply because he’ll be living there. $150 a month plus half of the utilities is incredibly cheap rent, anywhere. Why wouldn’t he pay rent? It’s still $125 a month less than he’s paying now. If/when he does move out, I will find a roommate, and I would expect them to pay rent, too.
I think it would make my mother happy to know that I had the security of owning my own home.