The Truth About Buying a House With Your Boyfriend

The Fun Part: Writing Up The Wish List

The first stage of buying a house with your boyfriend is the most fun! You have decided to purchase a home and are now spending hours on Zillow, drooling over what’s available. You have created a wishlist that includes must-haves such as a large kitchen, an updated master bath, and hardwood floors. You may be pinning away on Pinterest and have your favorite HGTV shows on repeat.

I’ve been there.  While we both are very happy with our home, there are a few questions that I wish we discussed further in this stage before buying our home.

  • Is this our forever home?
  • How long are we realistically planning to live in this home?
  • Will we have kids in this home?
  • Is this the best location for us right now?
  • Do we see ourselves at the same jobs five years from now?
  • If we changed jobs at any time, would this location no longer be ideal?

If your answer to the first question is no, then cut your wish-list in half.  Someday, I want to live in a beautiful neighborhood with mature trees, a nice view, and a good sized lot. There was no reason for us to pay a premium to buy a home that fits that description now – but we did.

Similarly, if you are only planning on living in the home for a few years, you might want to re-evaluate your location strategy.  Perhaps you can buy a home in an up-and-coming area and flip the house or rent it out after a few years. We luckily picked a stable area in terms of home value but we didn’t pick a desirable area. If we sell our house in the next few years, we will need to work some major magic to make any profit on the sale after paying closing costs and commission.

If you aren’t planning on having kids in the next few years, maybe you don’t need that three bedroom. We have filled up all of our extra bedrooms with friends and family visiting, and we have roommates, but I do sometimes regret paying extra for bedrooms that we don’t really need.

Location is key. Although we saved money by buying a house in the ‘burbs, and probably save money daily by avoiding bars and restaurants,  we end up spending money on other things (commuting, buying furniture to fill up the rooms, etc).  Additionally, we had put entertaining space as a must-have on our list but now realize that we live too far out from our friends to entertain regularly.

Even if you are 100% committed to your jobs, you should play out where you would want to live if either of you changed jobs in the next few years. We work in two different cities so we chose a home somewhere near the middle of the two. Little did we consider the effect the commute would have on me, the job opportunities that would pop up in other locations for both of us, or the fact that I would remain super happy with my job while my significant other would grow less and less happy with his job.

The Important Part: How Much House Should You Buy

We were shocked by the amount for which we were pre-approved. We ended up buying a home for considerably less than that pre-approved amount, but we still should have bought for even less that we did.

We justified going with a move-in ready home since we thought we didn’t have the extra cash after the down payment for a renovation. This home was priced significantly higher than the other houses we viewed with our realtor since we didn’t really have a set budget. I recommend keeping all of the houses you view within a similar price range so you can realistically compare between them all and to avoid the psychological trap we fell into – of course the higher price home will look better!

We didn’t anticipate the costs of utilities, furniture, and home repairs. We also didn’t anticipate that I would find MrMoneyMustache and would want to become financially independent in the next decade. Some of the money we are paying towards the mortgage I would rather be throwing at our debt or into investments that could help our future. We are not in a bad situation because of the house (we could afford this price) but I can concretely say that we would be in a better financial situation if we had targeted a less expensive house.

Lastly, many experts argue that its fair for each party to pay their percentage towards household income toward the mortgage. We use this approach since we chose a house that we knew going in we could not split the mortgage 50/50.  As the higher earner, I was aware that I would pay a much higher portion of the mortgage and that was fine. I wanted the nicer home that we could afford with my higher contribution. Although not married, we were committed to each other long term, had been living together for 2 years, and I knew that even if things didn’t work out, I wouldn’t regret the extra contribution.

I don’t think all non-married couples would be able to manage this approach everyday. Admittedly, even we have times where we feel weird about it.  My recommendation for non-married couples is to buy a home where you both can afford to contribute 50/50, buy separately, or rent.  Save the remaining money towards your future.

The Real Part: Surviving Post-Purchase

As I mentioned above, we never anticipated the utilities,  the cost of furniture, and home repairs.  We managed to put furniture in each room (with 0% interest credit cards) but barely have any decorations.  (The Pinterest designs I had dreamed of  just never came to life – way too expensive and not what we want to spend our money on right now).

We’ve had a few real adult issues (Carbon Monoxide false alarm, broken furnace, and a pipe leak) that made us freak out and taught us something new about home ownership and upkeep.

We have also made great memories in the home. We love to have our coffee in the morning looking out at the beautiful trees, we’ve invited friends and family to visit, and we’ve started cooking more regularly in our kitchen.  Truly, we love living here.  We love the location – and we are pretty happy in our jobs too. Except when sometimes we hate the location and we hate our jobs.  🙂 hehe

It’s hard to explain but important to know that purchases like a home come with much happiness and much regret.  I think it’s hard to find one without the other. Non-married couples must consider all their choices carefully before making such a large purchase.


Pros and Cons of Summer Roommates

Spring is coming to a close and summer is quickly approaching ~ although the snowstorm that hit this weekend makes me think otherwise! Second year in a row that we have had a Mother’s Day snowstorm.  What is up with this weather?!

Mother's Day Snowstorm

A Trip Down Roommate Memory Lane

It’s time for Mr. Debt Albatross and I to determine if we want summer roommates. We have hosted two roommates prior and had two completely different experiences.  Our first roommate experience was great.  Roommate 1 was all of the things you look for in a roommate. He was clean, respectful, pleasant to interact with, timely with payments plus much, much more.  He was well-traveled, a great cook, down-to-earth, helped out, and the type of guy who you would want to have a beer with and would leave the conversation knowing more than you had before. He was a bonus to our bank account and to our lives. The second roommate, while also a nice guy, did not connect with us the same way as the first roommate and he also struggled a bit on the tidiness front. (In short, Mr. Debt Albatross was not pleased with the way he left the kitchen almost every single night. It created an awkward, tense environment that was not worth the rental income). We were a bit spoiled with our first experience and now a bit jaded after our second.

We took the Spring off from roommates and now have an opportunity to host roommates again for the summer.  The expected rental income would be around $1875 total.  Not a fortune but certainly helpful to our debt payoff goals.

I’m painting a rosy picture of the first roommate situation and it wasn’t all rosy. Roommates are roommates.  You can’t eliminate the inconveniences of having a stranger in your house, the lack of privacy, the hopefully occasional times where they don’t treat your stuff exactly as you treat your stuff because you own it, the fact that they never seem to buy shared goods such as toilet paper, dryer sheets, or paper towels, or the house guests they invite over – hopefully planned guests but the chance of unplanned overnight guests as well.

Remembering It’s Paid Work

Hosting roommates (and I’m using the word hosting instead of having on purpose) takes work.  Home owners need to provide them with a nice place to live in exchange for a check each month. It’s a two way street. Some of the up-front work includes setting up the room and bathroom with furniture, bedding, sheets, towels, soap, shower curtain, a hamper, etc.  The long-term maintenance includes some basic cleaning, provision of the shared goods as mentioned above, addressing any issues that come up, and the continuous work to make living in the home a good place for them. That last item includes pleasant conversation in shared spaces, respect of their space and belongings, and the creation of a neutral or at best pleasant living environment.

Anytime we got frustrated with Roommate 2, I had to remind myself that he is paying us. We’ve all experienced landlords that think it’s a privilege to live in their home and seem to forget the fact that the renters are paying their mortgage. You’ll hear statements like “we just redid the floors, aren’t you lucky?” or the landlord will deduct money from the security deposit because they have different definitions of normal wear and tear than the law. (I had a landlord in college take hundreds of dollars from our security deposit for couch cleaning even though we kept the couches spotless and barely sat on them in the two and a half months we were there.  I had another landlord send us an angry letter that included a rant about not vacuuming the curtains before we left. Dusty curtains are careless but not unforgivable).

In my opinion, Renters aren’t going to treat a home the same way that an owner would – and that’s just the way it is.  Renters don’t have any long term skin in the game. It’s something that landlords needs to accept and consider in their pricing.

Now there is a certain level of acceptableness that is expected from renters. Roommate 2 who would explode food in our oven and microwave without cleaning it up, left the gas burner in the grill on all night then told us the next day we needed to buy a new one, spilled and left trail mix in the couch cushions of our new couch, left food in the sink instead of rinsing it down the garbage disposal every night, among other transgressions – that crossed the line.  The occasional transgression though should be expected and factored into the pricing.

 Figuring Out Pricing and Making It Worth It

We priced on the low side for Roommate 1 for a few reasons. First, we knew what the competition was pricing and we wanted to beat it. Second, we didn’t know any better.  Since then, we upped the rent $15 per month for Roommate 2 and $70 per month more than that for this summer’s roommates. We told ourselves that the reason we were upping the price for Roommate 2 was cable but we’ve realized recently it’s much more than just cable.  We had to pick a price that accounted for the financial and emotional costs of having a roommate (the toilet paper, utilities, the inconvenience, etc).  All in all, we are expecting to make around $20/day on the summer roommate(s) less any expenses.

When I first did the math and saw the extra income came out to around $20/day I was kind of disappointed.  I used to spend that amount each day on coffee and lunch at work. It seems so small! I bring my coffee and lunch to work now but the math is a simple reminder of how important it is to keep doing so. If we’re going to go through the inconvenience of a roommate, we need to make it worth it by spending less.

We ultimately decided to go for it and will be securing the summer roommate(s) later today.  I can only hope we have a situation closer to Roommate 1 but beggars can’t be choosers!

Taxes, Hooray!

Mr Debt Albatross and I need to pay off over $8 grand of debt each month in order to meet our payoff goal. We’re on track to meet this month’s goal due to a hefty tax refund. Since our lives became more complicated in the past year (bought a home, started grad school, etc.), it took us three days to finish filing our taxes. Thank you, Google.  The following is what we learned in the process:

  • When you own a home with someone as Joint Tenants, you can each deduct the portion of the mortgage interest you paid.  Alternatively, you can have one person deduct all of the mortgage interest.  It may make more sense to have the person in the highest tax bracket deduct all of the mortgage interest.
  • In addition to mortgage interest, you can deduct private mortgage insurance (PMI) payments if you have them, loan origination points, and property taxes.  The PMI deduction phases out after you reach $100 grand in income. It also doesn’t matter if you paid the points or the seller.
  • You can compare the tax form you receive from your lender with the HUD form you receive at closing to ensure you’re deducting the maximum amount possible.  We found some discrepancies and were able to deduct more by using the amount on the HUD form.
  • If you don’t take the standard deduction, you can itemize.  First time itemizers like us will wish that they had categorized their expenses throughout the year. It was tedious searching through emails, bank accounts, and Mint to find tuition payments and donation receipts. Although I didn’t mind hunting for more money.
  • Education credits, tuition and student loan interest deductions phase out after $60 grand in income.
  • If your employer reimbursed you for part or all of your tuition, it can be complicated to figure out what to report. I googled this topic significantly. You need to determine if the reimbursed amount was included in your W2, if it was over the $5250 you can receive tax free, or if it was a working condition fringe benefit. Additionally, you can only deduct the dollars you actually paid, not any dollars reimbursed by your employer.
  • If filing taxes online, search for coupon codes. We received 20% off due to a promotion we found on Retailmenot. If you are under a certain income limit and filing a basic return, you can likely file for free through some of the major tax sites.

Our federal refund is currently pending. It took less than a week from filing to receive the refund. We’re still waiting to hear on the state refund. I’ve already scheduled a credit card payment for Monday. Can’t wait to see that balance go down!