My boyfriend owns a house with a 30 year mortgage of $150,000 at 4% interest. He has $275,000 in cash and in retirement accounts. He is retired.
My house is paid off. I have $50,000 in cash and in retirement accounts. I would like to retire in a year or two.
We want to live together, but we have not been able to agree on a fair “rent” to pay. He doesn’t want to live in my house because he has fewer amenities.
He believes I should pay half of his monthly expenses in his nicer, more expensive house. He could pay off his mortgage and save $600 a month, but he likes to have cash.
I gave up that luxury and paid off the mortgage. I am now working on building my savings. I don’t think it’s fair that I’m paying half the cost of the mortgage interest.
I don’t know what kind of repair and maintenance costs he should expect from me, if I don’t have a share in his house. There are many points of view, none of which seem fair.
These are the options he presented:
· I live in his house and therefore I can rent mine. Pay him half of what I get from that rent.
· Pay half of the actual cost of living and maintaining his house while I live there.
· Pay him what I pay to live in my current home for taxes, insurance and utilities: $800 per month.
What do you say, Moneyist?
The owner of the house and the girl
Dear home owner,
I’m sure your house is just as beautiful. And just because he believes it, doesn’t make it so. If you don’t pay the mortgage on your own house, I don’t believe you should pay a cent more to live in his house.
That is, you shouldn’t get out of this deal by paying more just because he (a) wants you to live in his home and (b) help him pay the mortgage or taxes and maintenance.
You both made different choices: Yours was a home that’s free and mortgage-free, so you can spend this time building up your savings for retirement and/or a lean day.
You’ve worked hard to pay off your mortgage and have $50,000 in savings, less than 20% of your boyfriend’s savings. He has $150,000 left on his mortgage and that’s his choice.
“If his goal is to find help paying off half of his mortgage, he can find a tenant to do it for him. “
You are not the answer to his long-term financial plans, you are his partner in life. If his goal is to find help paying off half of his mortgage, he can find a tenant to do it for him. What your expect from you? Forget what he expects.
From the way he approaches this deal, it seems he wants the equivalent of detergent and fabric softener – a girlfriend and a housemate in one convenient bottle to keep his financial plans smooth and clean.
Bottom line: you shouldn’t jeopardize any plans to build your nest. The lady is not for turning. Agree to his plan only if – with the help of an actual tenant in your home – it helps you too.
In other words, the desired outcome is more important to you than the suggestions he made. You could save $600 a month! That’s his business. It’s not yours. What do you want to have in your pocket every month?
Figure out what your you want, and then backtrack based on that goal. For example, if you can pay him $800 a month, collect $1,600 in rent on your home, and put $800 into your savings, do it.
You’ve come a long way. Don’t let these negotiations ruin that.
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