Getting a Mortgage...Have I Gone Completely Nuts?

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Robrus1
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Getting a Mortgage...Have I Gone Completely Nuts?

Postby Robrus1 » Wed Aug 14, 2013 10:44 am

[LEFT]OK, so my girlfriend of several years and her two kids live with me in my home. My home is a good first home, and I don't owe anything on it. We both want a bigger place with some acreage and a pool and a shop. We found the perfect place, and it's a bit more than I'd like to spend. It's doable, but the mortgage payment would be about 1/3 of our combined income. If she ever left me, I could pay it for a while, but it'd take up about 60% of my pay, so I'd have to sell it and downgrade.

On one hand, we'd be building good equity every month, but on the other, I enjoy not having a mortgage. I mean, the house we are in now is a reasonable size and it's not super cramped or anything, but we have 3 dogs and the back yard isn't very big. We want space between neighbors, so we have our reasons, but maybe this is just not the best idea. Interest rates aren't as low as they were a year ago and having a 20 or 30 year commitment to pay for a house because we want it, not because we need it, just seems questionable. What do you all think? Am I nuts?[/LEFT]
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MemberSince99
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Postby MemberSince99 » Wed Aug 14, 2013 11:11 am

No, but I wouldn't do it. You would be dependent on her being with you. You've been together for years, but I was married for years and am divorced today. Things happen. A multiple year commitment like that when you would need help to pay for it, I would not be comfortable with that personally.

I say use the money you are saving on not having a mortgage to continue to build your equity. If at some point down the road you want something more, pay for more of it upfront so you could handle it on your own if you had to. It iwll also give you more time to see if what you have as a relationship is going to last long term.

Robrus1
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Postby Robrus1 » Sat Aug 17, 2013 8:02 am

Good point and that's exactly what I SHOULD do. We are going to look at another house today that's much more affordable should things not work out between us. It'd be nice to have such a cool house, but it's nice not owing the credit union money every month for half or 1/3 of my existence. This is a tough one.
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Postby Sevenfeet » Tue Aug 20, 2013 9:54 am

Any reason you two haven't gotten married yet?
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Midori
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Postby Midori » Tue Aug 20, 2013 12:36 pm

I wouldn't make a major purchase with someone I wasn't married to.
I wouldn't buy a house that I couldn't put 20% down in cash.
I wouldn't buy a house that would leave me saddled with debt for 15, 20, 30 years. I buy a house that I can aggressively pay down in under five years... three or four, if possible.
I look at a house as a place to live. I look at my investments as investments.
"Wanting a bigger yard" would not be a compelling reason for me to acquire debt.
FWIW, when I screen tenants, one benchmark is whether they make 3x the rent. That's reeeally cutting it close, but doable with a disciplined budget... 4x or 5x the rent (or mortgage payment) leaves more room for unexpected expenses. (Car trouble, job loss, short hours, medical bills.)

Robrus1
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Postby Robrus1 » Wed Aug 21, 2013 9:57 am

Sevenfeet wrote:Any reason you two haven't gotten married yet?


We plan on it, but we just haven't gotten around to it.
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Robrus1
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Postby Robrus1 » Wed Aug 21, 2013 10:02 am

Midori wrote:I wouldn't make a major purchase with someone I wasn't married to. We plan on it.
I wouldn't buy a house that I couldn't put 20% down in cash. I can put more than that.
I wouldn't buy a house that would leave me saddled with debt for 15, 20, 30 years. I buy a house that I can aggressively pay down in under five years... three or four, if possible. That's not normal for everyone.
I look at a house as a place to live. I look at my investments as investments.
"Wanting a bigger yard" would not be a compelling reason for me to acquire debt. Among other reasons listed above, why not?
FWIW, when I screen tenants, one benchmark is whether they make 3x the rent. That's reeeally cutting it close, but doable with a disciplined budget... 4x or 5x the rent (or mortgage payment) leaves more room for unexpected expenses. (Car trouble, job loss, short hours, medical bills.)


We make about 3X what our mortgage would be. My car payment is low and hers is paid off, we have no cc debt, so I would think we'd be ok. The debt seems like a trade off to live somewhere better. The housing market never crashed and has remained strong where I live. I guess even though we could do it, maybe we should get married first or just stay put. I just don't know.
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Midori
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Postby Midori » Wed Aug 21, 2013 12:24 pm

Well, what would "live somewhere better" mean? Is "better" a better school district for her kids? Would it be closer to your work or her work and save a significant amount of commute time? Is "better" a house in a planned neighborhood with a pool and racquetball courts and an HOA? If "better" just brings granite countertops and stainless steel appliances, drop $15k on a kitchen remodel, $5k on landscaping, and get a club membership. But while I wouldn't mind kicking a few tires and seeing what's on the market and getting ideas ("Look, dear! They have a cabana in their backyard with a hibachi! Isn't that awesome?!") But otherwise, I would pay off my car, save for a down payment, and figure out if my relationship was going anywhere or not. If it was, I'd commit, and get on with life. If it wasn't, am I doing her and her family any favors by dragging out the relationship?

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Postby Robrus1 » Wed Aug 21, 2013 1:24 pm

Midori wrote:Well, what would "live somewhere better" mean? Is "better" a better school district for her kids? Would it be closer to your work or her work and save a significant amount of commute time? Is "better" a house in a planned neighborhood with a pool and racquetball courts and an HOA? If "better" just brings granite countertops and stainless steel appliances, drop $15k on a kitchen remodel, $5k on landscaping, and get a club membership. But while I wouldn't mind kicking a few tires and seeing what's on the market and getting ideas ("Look, dear! They have a cabana in their backyard with a hibachi! Isn't that awesome?!") But otherwise, I would pay off my car, save for a down payment, and figure out if my relationship was going anywhere or not. If it was, I'd commit, and get on with life. If it wasn't, am I doing her and her family any favors by dragging out the relationship?


"Better" means more square footage including an extra bedroom, a newer more updated home with an outdoor kitchen, heated saltwater pool with a waterfall that the kids who are 9 and 5 will love, gas fire pit, outdoor tv and stereo, much closer to my work, an 8 foot privacy fence that my Great Pyrenees won't try to jump over, and close to a nice, quiet neighborhood park. People act as though you have to get married to be serious about a relationship. Just because we aren't married, doesn't mean either of us have one foot out the door. It just means we aren't in a big hurry. We also aren't religious so we don't feel pressure to get married for religious reasons.
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Midori
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Postby Midori » Wed Aug 21, 2013 2:33 pm

OK, so let's see what you get for one-third of your combined salary. The average household income in TX is $51k, and I'm guessing y'all make a lot more than that. But one-third is still one-third.

Extra bedroom, great.

Have you ever maintained your own pool before, let alone a saltwater pool? It's not a walk in the park.

Outdoor kitchen can be good. Do you think you'd use it once a week? Once a month? Once a season?

Do you seriously think you'll sit outside around a fire pit watching your outside tv and stereo on a regular basis? I don't know what part of TX you're in, but in the four parts I've lived in, there's a few weeks of perfect spring and a few weeks of perfect fall, and the rest of the time, you've got the A/C or the heat running. :oP

Much closer to your work, fabulous.

Tall fence, that's nice, presuming you've got no-fence or chain-link right now. We redid our fence last year. It was a four-day project with the help of an auger, but our place is on a giant lot, so a small backyard could easily be a weekend.

Close to a park. We live in Texas. Are there really any places to live that are more than five minutes from a park? :oP

What you value in a house is different from what I value, obviously, but it seems that on a credit card forum, of all places, people who are looking to acquire debt are probably going to make sure that debt is worth acquiring. :o) And that's totally your personal judgment. :o) But you're talking about one of my favorite subjects, and I'm antsy to get my own next acquisition moving forward so I can go have fun with it instead of sitting on the computer. So I don't mind being practical about what I have no doubt is a fabulous house. *thumb twiddles* :o)

As far as the marriage thing vs cohabitation goes, that's your business, too. But it's foolish for anyone to suggest there aren't any legal or social or health or economic benefits involved in one over the other. Especially with a 5-yo and a 9-yo in the equation.



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