Just like everyone else during the housing boom last decade, I went ahead and purchased a home that I could not afford. Back then, like everyone else, trying to get a loan approved was easy with no problems at all. As a single guy, my plan was to have a couple roommates to live with me to help offset some of the monthly payments associated with owning a home, namely the mortgage. With the mortgage rate at 6.75%, my mortgage payments was at a skyrocket high of $2,250/mo with my net monthly income barely hovering around $3,000/mo at the time. How I got approved for the loan, I still have no idea. In fact, I still curse at the bank that originally approved me for that loan. However, having two roommates in a 3-bedroom townhome definitely helped me not only offset that huge monthly cost, but also help me save a few bucks a month at the same time!
Fast forward a few years and a mortgage refinancing at 5.5%, I now make enough money to be able to afford this home, without the help of any roommates. Although I still have one roommate currently, I can live comfortably on my own without the help of my roommate’s money. I still allow him to live with me because the money is good. It’s like having a discount on my mortgage payment.
I can do this now since I am still single. I told him that once I get married, he must move out. The money I collect from my roommate does get included into my source of income and does account for in my budgeting. I have been depositing most of my savings every month in a high-yield online savings account such as ING Direct. However, the money I will save through my roommate’s rent can no longer be accounted for when he does in fact move out in the future so I will definitely be missing that. Until then, I will be embracing the money I will be saving every month.