My friend owns a house with a 30-year mortgage balance of $150,000 at 4% interest. He has $275,000 in cash and retirement accounts. He is retired.
My house is paid off. I have $50,000 in cash and retirement accounts. I would like to retire in one to two years.
We want to live together, but we have not been able to agree on a fair “rent”. He doesn’t want to live in my house because it has less amenities.
He thinks I should pay half of his monthly expenses on his nicer, more expensive house. He could pay off his mortgage and save $600 a month, but he likes having money.
I have given up that luxury and paid off my mortgage. Now I’m working on building my savings. I don’t think it’s fair for me to pay half of the mortgage interest expense.
I don’t know what repair and maintenance expenses I should expect if I don’t have equity in his house. There are many opinions, none of which seem fair.
Here are the options he offers:
· I live in his house and thus rent out mine. Pay him half of what I net of that rent.
· Pays half of the actual cost of living and maintenance 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, money know?
Homeowner and girlfriend
I’m sure your house is just as lovely. And just because he believes it doesn’t make it so. If you don’t pay the mortgage on your house, I don’t think you should pay one red cent more to live in his house.
This means you shouldn’t back out of that arrangement, pay more just because he (a) wants you to live in his house and (b) help him pay his mortgage or taxes and child support.
You both made different choices: you had a mortgage-free home so you could spend this time saving for retirement and/or a rainy day.
You’ve worked hard to pay off your mortgage and have $50,000 in savings, which is less than 20% of your boyfriend’s savings. He has $150,000 left on his mortgage and that is his choice.
“If his goal is to find help paying off half the 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 life partner. If his goal is to find help paying off half the mortgage, he can find a tenant to do it for him. What to do you expect from you? Forget what he expects.
As he approaches this arrangement, by the way, he seems to want the equivalent of detergent and fabric softener, a girlfriend and a tenant in one handy bottle to keep his financial plans smooth and clean.
Bottom line: You shouldn’t jeopardize your nest egg building plans. A lady is not meant to be turned. Go along with his plan only if it also helps you with tenant help in your home.
In other words, the desired result is more important to you than his suggestions. He could save $600 a month! That’s his business. Not yours. What do you want in your pocket every month?
Guess what you you want, and then work your way back based on that goal. For example, if you can pay him $800 a month, collect $1,600 in rent for your house, and save $800, do it.
You have come a long way. Don’t let these conversations ruin it.
Check Moneyist’s private Facebook a group where we seek answers to life’s most difficult money questions. Readers write to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.
Moneyist regrets not being able to answer questions individually.
By emailing your questions, you agree to them being posted anonymously on MarketWatch. By submitting your story to Dow Jones & Co, publisher of MarketWatch, you understand and agree that we may use your story or versions of it in all media and platforms, including through third parties..
I built a property portfolio of 23 units while we were dating. How much should I give my fiance in our marriage?
“We won’t outlive our money”: How can we give $10,000 to our nieces and nephews without offending the rest of the family?
‘I hate being cheap’: Is it still acceptable to show up at a friend’s house for dinner with just one bottle of wine?