Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

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MortgageOnBlack
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Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by MortgageOnBlack » Tue Sep 06, 2016 4:08 pm

Hello,

I was in a great position to buy a home in Denver in 2011 when prices were low and unfortunately did not jump on the opportunity; I have continued to beat myself over this. My girlfriend and I have been staying with my parents for the last year and have been able to save about $14,600 for a down payment. Unfortunately, small homes near and around Denver are around late 200's-early 300's. I'm an IT manager who grosses about $60k and she is a elementary school teacher who makes roughly $40k. I do not have any debt or student loans (just revolving CC's which I pay in full monthly). My girlfriend has a new car which she makes payments on (3 years left and owes about 15k), 5k in Credit Card debt, and also has about 35k of student loans (she is currently working on her Master's). Due to her high debt to income, we will most likely be applying for a loan with my credit (credit score is 796 and just recently got pre-approved for 330k).

My fear is the super hot seller's market and over-extending ourselves with this mortgage. We are currently well under the recommended 20% down payment (the thought of PMI payments along with interest over 30 years makes me cringe), but desperately need a place of our own as my parent's house is rather small for the both of us and our dog. We don't have any kids, but we have a Golden Retriever who I'd like to get his own yard for (my parent's do have a good size yard, but we really need our own). We are both natives and have been pretty down by the fact that we may be house-poor just to live here. Our desire to live here is high because of family.

Does anyone have any unbiased suggestions? I've been looking on Redfin and the houses that are available don't make the most financial sense for the prices they want. I'm just trying to think outside of the box a bit; as first-time buyers, buying a house in that range makes us a little nervous as I feel like they are over-priced and we will be over-extended. I wish renting was a viable option for the time being, but rent is ridiculous (+1200 dollars for a 1bedroom now!) We both enjoy our free-time and traveling. I also enjoy saving regularly (I have about 49k in a Traditional IRA, and 10k in a Roth IRA, along with $18k in my personal savings/emergency fund)

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by BlueCable » Tue Sep 06, 2016 4:38 pm

MortgageOnBlack wrote: I'm an IT manager who grosses about $60k

we will most likely be applying for a loan with my credit (credit score is 796 and just recently got pre-approved for 330k).

We are currently well under the recommended 20% down payment (the thought of PMI payments along with interest over 30 years makes me cringe),
Please do not get a mortgage for 5.5 times your salary when you don't even have 20% down. Don't consider your GF's income; she has more debt than income, and if you break up, you will be in trouble.

You can't afford to buy a house in Denver right now. You either need to stay where you are, rent a small place, or look at a suburb.

PS - On the radio today I heard an ad for a seminar looking for a "small number" of "qualified people" looking to learn how to flip houses using "other people's money" and requiring "no work." Sounds a lot like the shoeshine boy giving stock tips.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by unclescrooge » Tue Sep 06, 2016 4:46 pm

MortgageOnBlack wrote:Hello,

I was in a great position to buy a home in Denver in 2011 when prices were low and unfortunately did not jump on the opportunity; I have continued to beat myself over this. My girlfriend and I have been staying with my parents for the last year and have been able to save about $14,600 for a down payment. Unfortunately, small homes near and around Denver are around late 200's-early 300's. I'm an IT manager who grosses about $60k and she is a elementary school teacher who makes roughly $40k. I do not have any debt or student loans (just revolving CC's which I pay in full monthly). My girlfriend has a new car which she makes payments on (3 years left and owes about 15k), 5k in Credit Card debt, and also has about 35k of student loans (she is currently working on her Master's). Due to her high debt to income, we will most likely be applying for a loan with my credit (credit score is 796 and just recently got pre-approved for 330k).

My fear is the super hot seller's market and over-extending ourselves with this mortgage. We are currently well under the recommended 20% down payment (the thought of PMI payments along with interest over 30 years makes me cringe), but desperately need a place of our own as my parent's house is rather small for the both of us and our dog. We don't have any kids, but we have a Golden Retriever who I'd like to get his own yard for (my parent's do have a good size yard, but we really need our own). We are both natives and have been pretty down by the fact that we may be house-poor just to live here. Our desire to live here is high because of family.

Does anyone have any unbiased suggestions? I've been looking on Redfin and the houses that are available don't make the most financial sense for the prices they want. I'm just trying to think outside of the box a bit; as first-time buyers, buying a house in that range makes us a little nervous as I feel like they are over-priced and we will be over-extended. I wish renting was a viable option for the time being, but rent is ridiculous (+1200 dollars for a 1bedroom now!) We both enjoy our free-time and traveling. I also enjoy saving regularly (I have about 49k in a Traditional IRA, and 10k in a Roth IRA, along with $18k in my personal savings/emergency fund)
Get rid of the dog and buy a condo. Pet ownership and LBYM do not always go together.

Seriously, you're staying with your parents and only managed to save $15k since 2011? What's the story there?

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by MortgageOnBlack » Tue Sep 06, 2016 4:46 pm

unclescrooge wrote:
MortgageOnBlack wrote:Hello,

Get rid of the dog and buy a condo. Pet ownership and LBYM do not always go together.

Seriously, you're staying with your parents and only managed to save $15k since 2011? What's the story there?
We're definitely not getting rid of the dog; we love him very much so that is out of the question. :D

I didn't mention; I was staying with parents in 2011-2012 and saved a sizeable down-payment (20k) which I ended up using late 2012-2014 when I was laid off while trying to start my own IT consulting business which unfortunately didn't pan out. I was forced to get a full-time job when the money dried up. From 2012 through 2015, I lived in nice apartment and didn't stay with family.
Last edited by MortgageOnBlack on Tue Sep 06, 2016 5:00 pm, edited 1 time in total.

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MortgageOnBlack
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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by MortgageOnBlack » Tue Sep 06, 2016 4:48 pm

BlueCable wrote:
MortgageOnBlack wrote: I'm an IT manager who grosses about $60k

we will most likely be applying for a loan with my credit (credit score is 796 and just recently got pre-approved for 330k).

We are currently well under the recommended 20% down payment (the thought of PMI payments along with interest over 30 years makes me cringe),
Please do not get a mortgage for 5.5 times your salary when you don't even have 20% down. Don't consider your GF's income; she has more debt than income, and if you break up, you will be in trouble.

You can't afford to buy a house in Denver right now. You either need to stay where you are, rent a small place, or look at a suburb.

PS - On the radio today I heard an ad for a seminar looking for a "small number" of "qualified people" looking to learn how to flip houses using "other people's money" and requiring "no work." Sounds a lot like the shoeshine boy giving stock tips.
I appreciate your insight. We may look at rental's again, but I'm just tired of renting. I guess that's life. Thank you

Leemiller
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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by Leemiller » Tue Sep 06, 2016 4:48 pm

Buying a home with someone you aren't married too can be a huge, huge legal mess should anything happen. I would never do that.

Also, maybe you can buy a condo or townhouse and upgrade later when you have the incomes. Dogs can be a luxury in a high COL area.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by Shackleton » Tue Sep 06, 2016 4:50 pm

Get a better job. IT managers where I work (in CO) make $90-120k
“Superhuman effort isn't worth a damn unless it achieves results.” ~Ernest Shackleton

Billionaire
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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by Billionaire » Tue Sep 06, 2016 4:53 pm

Determine if your salary of $60,000 in the Denver area for an IT manager is competitive. I'm in IT, not a manager and make a lot more than you.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by flyingbison » Tue Sep 06, 2016 5:02 pm

Leemiller wrote:Buying a home with someone you aren't married too can be a huge, huge legal mess should anything happen. I would never do that.
Why is it any more of a legal mess than a divorce?

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by MortgageOnBlack » Tue Sep 06, 2016 5:03 pm

I'm not really sure where these high paying IT jobs are unless you have an extremely specialized IT skill. $60k is actually a respectable salary for a small business. I'm curious what kinds of IT jobs these are where you are getting paid that much
Last edited by MortgageOnBlack on Tue Sep 06, 2016 5:15 pm, edited 1 time in total.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by jf89 » Tue Sep 06, 2016 5:06 pm

Not the answer you want, but renting is the answer for two reasons:

1. You're not married. Too much can go wrong. Even if you write up a contract of some sort stating that one of you put down the down payment and has the mortgage in their name and the other is to pay half the mortgage, taxes, utilities, etc... you're not going to stick to it, and that's when things really get messy in the breakup.

2. You don't have the money.

My wife and I rented a home in a city for a couple years before and immediately after getting married for both of these reasons. You should be able to find homes or townhomes available for rent. Redfin, Zillow, Apartments.com... they all have listings. After the wedding we started house shopping, and that should be your mindset as well.

Plus, what's the rush if it's a seller's market?
"Save as much as you can, diversify diversify diversify, and you can't go wrong with tech stocks" | -First investing advice I recall from my parents in the 90's (two outta three ain't bad)

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by MortgageOnBlack » Tue Sep 06, 2016 5:10 pm

jf89 wrote:Not the answer you want, but renting is the answer for two reasons:

1. You're not married. Too much can go wrong. Even if you write up a contract of some sort stating that one of you put down the down payment and has the mortgage in their name and the other is to pay half the mortgage, taxes, utilities, etc... you're not going to stick to it, and that's when things really get messy in the breakup.

2. You don't have the money.

My wife and I rented a home in a city for a couple years before and immediately after getting married for both of these reasons. You should be able to find homes or townhomes available for rent. Redfin, Zillow, Apartments.com... they all have listings. After the wedding we started house shopping, and that should be your mindset as well.

Plus, what's the rush if it's a seller's market?
Great advice. I think I'm a little lured in by the low interest rates, plus the fear of "buy now or risk never being able to afford" is probably getting the best of me. Thank you

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by delamer » Tue Sep 06, 2016 5:13 pm

I don't understand how you got preapproved for a $330K mortgage based in your income alone. Maybe both of yours combined, but not $60K.

Is it an interest-only loan or one with an interest rate that adjusts (will jump) in a year?

In any case, don't buy a house based on a $330K mortgage.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by boglephreak » Tue Sep 06, 2016 5:14 pm

my friend bought a house with her bf. then they broke up. then they had to sell the house in a buyer's market. it was bad. i would not buy a house with a gf.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by flyingbison » Tue Sep 06, 2016 5:17 pm

boglephreak wrote:my friend bought a house with her bf. then they broke up. then they had to sell the house in a buyer's market. it was bad. i would not buy a house with a gf.
I bought a house with my first wife. Then we got divorced and had to sell the house for less than we paid for it.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by MortgageOnBlack » Tue Sep 06, 2016 5:20 pm

delamer wrote:I don't understand how you got preapproved for a $330K mortgage based in your income alone. Maybe both of yours combined, but not $60K.

Is it an interest-only loan or one with an interest rate that adjusts (will jump) in a year?

In any case, don't buy a house based on a $330K mortgage.
I'm not sure either, I know it was a hard credit pull and I was only interested in a fixed 30 year conventional. I had no intention on using the full 330k because I know it would be tight. I like having money for other things besides housing. Perhaps I misunderstood and he did run both of ours.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by Pajamas » Tue Sep 06, 2016 5:23 pm

Save a 20% downpayment and pay off your girlfriend's debt and then think about buying. The situation will be much clearer at that time.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by Watty » Tue Sep 06, 2016 5:24 pm

flyingbison wrote:
Leemiller wrote:Buying a home with someone you aren't married too can be a huge, huge legal mess should anything happen. I would never do that.
Why is it any more of a legal mess than a divorce?
In a divorce there is a good legal framework of how things should be split and the lawyers are pretty much just worrying about the details and how it applies in their situation.

In addition to divorce one of them could die or become disabled and their finances would be intertwined. For example if one of them dies then someone else might inherit their share of the house.

If an unmarried couple wants to buy a house together then they should both get a lawyer and have a formal agreement drawn up about the contingencies. Before gay marriage was legalized gay couples had to do this so it is has been pretty common.

Not a moral judgement, but if a couple does not want to get married and they don't want hire lawyers to formalize their relationship then they should not be buying a house together.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by saltycaper » Tue Sep 06, 2016 5:25 pm

I'd rent until married, if you think that will happen someday, or until I easily could afford a place on my own large enough for a future family. I would not bother with a "starter home."
Quod vitae sectabor iter?

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by Shackleton » Tue Sep 06, 2016 5:28 pm

MortgageOnBlack wrote:I'm not really sure where these high paying IT jobs are unless you have an extremely specialized IT skill. $60k is actually a respectable salary for a small business. I'm curious what kinds of IT jobs these are where you are getting paid that much
No specialized skillsets needed at my company (which is a Fortune 500 company.) We build lots of apps to run our business in the finance/insurance sector. I've also worked for small startups that paid much more to their managers. If you haven't already, I'd check out Glassdoor.com. But you also sound young and that may be playing into your salary.
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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by MortgageOnBlack » Tue Sep 06, 2016 5:34 pm

Pajamas wrote:Save a 20% downpayment and pay off your girlfriend's debt and then think about buying. The situation will be much clearer at that time.
This is starting to sound like the best option... Thank you

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by MortgageOnBlack » Tue Sep 06, 2016 5:36 pm

Shackleton wrote:
MortgageOnBlack wrote:I'm not really sure where these high paying IT jobs are unless you have an extremely specialized IT skill. $60k is actually a respectable salary for a small business. I'm curious what kinds of IT jobs these are where you are getting paid that much
No specialized skillsets needed at my company (which is a Fortune 500 company.) We build lots of apps to run our business in the finance/insurance sector. I've also worked for small startups that paid much more to their managers. If you haven't already, I'd check out Glassdoor.com. But you also sound young and that may be playing into your salary.
Thank you. I'm 32, but have 12 solid years of experience. I may be shortchanging myself a bit in the type of companies have chosen to work for. Most have all be small under 20 employees; my current employer is pretty much him and I lol

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by beagle1 » Tue Sep 06, 2016 5:38 pm

I feel for you. I bought in Denver in 1998, and prices were not nearly as out of whack as they are now. It was possible to buy based on your salary. I've moved on, but held onto the house, and watched it quadruple in value. On the other hand, I find myself living in a condo, because I'm now in an even more expensive city. We have two dogs, and we make it work. A yard is better, but frankly our dogs sit around in a yard rather than staying active, and it does us a world of good having to walk them every day. So you could go that route, at least for the short-time, just move close to some open space or a dog run.

I do think others are right to raise concerns about buying with a non-married partner. I'd try to find a place you can buy on your own. If that's not workable, I'd sit it out for now and wait until you are earning more or the market looks more favorable again. It will be a buyer's market once again not that far into the future.
MortgageOnBlack wrote:Hello,

I was in a great position to buy a home in Denver in 2011 when prices were low and unfortunately did not jump on the opportunity; I have continued to beat myself over this. My girlfriend and I have been staying with my parents for the last year and have been able to save about $14,600 for a down payment. Unfortunately, small homes near and around Denver are around late 200's-early 300's. I'm an IT manager who grosses about $60k and she is a elementary school teacher who makes roughly $40k. I do not have any debt or student loans (just revolving CC's which I pay in full monthly). My girlfriend has a new car which she makes payments on (3 years left and owes about 15k), 5k in Credit Card debt, and also has about 35k of student loans (she is currently working on her Master's). Due to her high debt to income, we will most likely be applying for a loan with my credit (credit score is 796 and just recently got pre-approved for 330k).

My fear is the super hot seller's market and over-extending ourselves with this mortgage. We are currently well under the recommended 20% down payment (the thought of PMI payments along with interest over 30 years makes me cringe), but desperately need a place of our own as my parent's house is rather small for the both of us and our dog. We don't have any kids, but we have a Golden Retriever who I'd like to get his own yard for (my parent's do have a good size yard, but we really need our own). We are both natives and have been pretty down by the fact that we may be house-poor just to live here. Our desire to live here is high because of family.

Does anyone have any unbiased suggestions? I've been looking on Redfin and the houses that are available don't make the most financial sense for the prices they want. I'm just trying to think outside of the box a bit; as first-time buyers, buying a house in that range makes us a little nervous as I feel like they are over-priced and we will be over-extended. I wish renting was a viable option for the time being, but rent is ridiculous (+1200 dollars for a 1bedroom now!) We both enjoy our free-time and traveling. I also enjoy saving regularly (I have about 49k in a Traditional IRA, and 10k in a Roth IRA, along with $18k in my personal savings/emergency fund)

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by Shackleton » Tue Sep 06, 2016 5:39 pm

Who do you manage if it's just the two of you? :P

Seriously, you could make more money. Check out Glassdoor.com and thank me later. And yeah, save 20%, clear the gf's debt and get hitched. Actually, get hitched then clear the debt.
“Superhuman effort isn't worth a damn unless it achieves results.” ~Ernest Shackleton

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by RoadHouseFan » Tue Sep 06, 2016 5:41 pm

jf89 wrote:Not the answer you want, but renting is the answer for two reasons:

1. You're not married. Too much can go wrong. Even if you write up a contract of some sort stating that one of you put down the down payment and has the mortgage in their name and the other is to pay half the mortgage, taxes, utilities, etc... you're not going to stick to it, and that's when things really get messy in the breakup.

2. You don't have the money.

My wife and I rented a home in a city for a couple years before and immediately after getting married for both of these reasons. You should be able to find homes or townhomes available for rent. Redfin, Zillow, Apartments.com... they all have listings. After the wedding we started house shopping, and that should be your mindset as well.

Plus, what's the rush if it's a seller's market?
This is the correct answer, especially #1.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by MortgageOnBlack » Tue Sep 06, 2016 5:44 pm

Shackleton wrote:Who do you manage if it's just the two of you? :P

Seriously, you could make more money. Check out Glassdoor.com and thank me later. And yeah, save 20%, clear the gf's debt and get hitched. Actually, get hitched then clear the debt.
lol, I guess my title is a little misleading. I don't actually "manage" people; we are an outsourced managed services IT company. I manage the IT needs for various businesses remotely and on-site if needed. Thank you for the info; I really appreciate it.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by boglephreak » Tue Sep 06, 2016 6:14 pm

flyingbison wrote:
boglephreak wrote:my friend bought a house with her bf. then they broke up. then they had to sell the house in a buyer's market. it was bad. i would not buy a house with a gf.
I bought a house with my first wife. Then we got divorced and had to sell the house for less than we paid for it.
so you had the protections afforded to people who are married, not general civil litigation over who said what and promised what under bastardized versions of contract law. we have a whole legal system developed for those who choose to get married. it is expensive and time consuming, but not nearly like a contentious lawsuit between unmarried people.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by unclescrooge » Tue Sep 06, 2016 7:43 pm

MortgageOnBlack wrote:
unclescrooge wrote:
MortgageOnBlack wrote:Hello,

Get rid of the dog and buy a condo. Pet ownership and LBYM do not always go together.

Seriously, you're staying with your parents and only managed to save $15k since 2011? What's the story there?
We're definitely not getting rid of the dog; we love him very much so that is out of the question. :D

I didn't mention; I was staying with parents in 2011-2012 and saved a sizeable down-payment (20k) which I ended up using late 2012-2014 when I was laid off while trying to start my own IT consulting business which unfortunately didn't pan out. I was forced to get a full-time job when the money dried up. From 2012 through 2015, I lived in nice apartment and didn't stay with family.
That makes sense. Sorry your business didn't pan out.

People might tell you to not buy a house more than 3x your income, but don't just blindly follow these blanket statements.

It depends on many factors, some of which are your future earnings potential, desire to live in a location permanently, and willingness to take on risk.

I would probably buy a house in your position, but that's just me.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by 260chrisb » Tue Sep 06, 2016 7:58 pm

Don't do this! You're asking for a huge mess. I wasn't going to chime in until I read "buy now or never be able to afford"!! Hmmmmm.....sounds a lot like everything I heard in 2004, 2005, 2006, 2007.........better give this some serious thought!!

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by MortgageOnBlack » Tue Sep 06, 2016 8:28 pm

260chrisb wrote:Don't do this! You're asking for a huge mess. I wasn't going to chime in until I read "buy now or never be able to afford"!! Hmmmmm.....sounds a lot like everything I heard in 2004, 2005, 2006, 2007.........better give this some serious thought!!
Yes, my parents and friends all tell me, "don't rent... buy!"... Everything out here is overpriced and by the looks of it so are the rental rates. It just sucks to be in my shoes right now... not very many options :( decisions, decisions...

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by flyingbison » Tue Sep 06, 2016 8:33 pm

boglephreak wrote:
flyingbison wrote:
boglephreak wrote:my friend bought a house with her bf. then they broke up. then they had to sell the house in a buyer's market. it was bad. i would not buy a house with a gf.
I bought a house with my first wife. Then we got divorced and had to sell the house for less than we paid for it.
so you had the protections afforded to people who are married, not general civil litigation over who said what and promised what under bastardized versions of contract law. we have a whole legal system developed for those who choose to get married. it is expensive and time consuming, but not nearly like a contentious lawsuit between unmarried people.
Your post had nothing to do with contentious lawsuits, it was about a couple who broke up after buying a house together. And if you think that the "protections" afforded to married people prevent contentious lawsuits, I'm guessing you haven't been divorced.

I'm curious to know what legal protections I had when I was married (regarding the house) that I do not have now.
Last edited by flyingbison on Tue Sep 06, 2016 8:39 pm, edited 1 time in total.

flyingbison
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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by flyingbison » Tue Sep 06, 2016 8:37 pm

Watty wrote:
flyingbison wrote:
Leemiller wrote:Buying a home with someone you aren't married too can be a huge, huge legal mess should anything happen. I would never do that.
Why is it any more of a legal mess than a divorce?
In a divorce there is a good legal framework of how things should be split and the lawyers are pretty much just worrying about the details and how it applies in their situation.
A sufficient legal framework can be provided without marriage, so the real issue is being intentional about planning and protection, not marriage.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by david99 » Tue Sep 06, 2016 8:59 pm

I wouldn't be in a hurry to buy a property now. If you buy now, you may be kicking yourself in a few years when the housing bubble bursts and you bought at the height of the bubble. You may not even be able to sell a property in a few years for what you are going to pay now.

I agree with what other people said --- it's not a good idea to buy a house with a girlfriend. Buy a house together after you get married. Just rent for the time being and focus on paying off debt and getting a better paying job. Also, if you rent, you will have more flexibility to find a better paying job ---you won't be tied down to a house. I think that it's more advantageous for a young person to rent. A house is just a ball and chain that ties you to a certain location.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by delamer » Tue Sep 06, 2016 9:02 pm

flyingbison wrote:
Watty wrote:
flyingbison wrote:
Leemiller wrote:Buying a home with someone you aren't married too can be a huge, huge legal mess should anything happen. I would never do that.
Why is it any more of a legal mess than a divorce?
In a divorce there is a good legal framework of how things should be split and the lawyers are pretty much just worrying about the details and how it applies in their situation.
A sufficient legal framework can be provided without marriage, so the real issue is being intentional about planning and protection, not marriage.
This is exactly right. The problem is that many non-marrieds don't take care of the planning and protection.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by denovo » Tue Sep 06, 2016 9:08 pm

jf89 wrote:Not the answer you want, but renting is the answer for two reasons:

1. You're not married. Too much can go wrong. Even if you write up a contract of some sort stating that one of you put down the down payment and has the mortgage in their name and the other is to pay half the mortgage, taxes, utilities, etc... you're not going to stick to it, and that's when things really get messy in the breakup.
This was my first thought when I read opening post. Never buy a house with someone you're not married to.
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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by Slacker » Tue Sep 06, 2016 9:33 pm

If your dog is okay with other dogs, there are quite a few good dog parks in the area (though I admit my experience is all related to dog parks north of Denver in Boulder, Lafayette, Broomfield, Louisville, Thornton). We did go to one near the airport once, it was pretty good as well and we had 3 to choose from near the airport exit off of I-70.

I would say rent (apartment / condo) for now or buy a condo and take the dog to a dog park. Make sure that condo / apartment is something you can afford on just your salary while still being able to cover all your other bills/spending.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by radiowave » Tue Sep 06, 2016 9:39 pm

Let me approach this from a different angle . . . how far are you willing to drive to be in an affordable house? For example, north beyond Longmont, south past Castle Rock, west, well just over the mountains say Idaho Springs or Fair Play, or east toward . . . wow there actually isn't anything east of Denver for a few hundred miles but you get my drift. There is no indication that the market in Denver metro area will cool down anytime soon and less likely to reduce house prices at least for the foreseeable future. If you are working downtown, you have the option for light rail but not sure if housing around the area of the last stop or two meets your criteria. Evergreen? Castle Pine or Monument? Limon? Ft Collins/ Greely?
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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by andylawr11 » Tue Sep 06, 2016 11:59 pm

Keep the dog...for better or worse, ours is a member of the family. IMO the ROI on a loyal companion is worth the occasional inconveniences associated with pets...but i digress. I thought i would chime as I've been in somewhat that same place. What is your gut feeling about it? How long have you been with your GF? Do you anticipate getting married one day, but just are in no rush? My at the time GF (now fiancé and wife in a few days) and I bought a home together several years ago. I was solidly against it at first, for all the reasons discussed above, because i was perfectly happy living together closer to downtown and work in a small home we rented. After months of discussions about the topic, we started shopping. We live in a MCOL, which has also seen the housing market rebound to prices exceeding the peaks of the real estate bubble. Bottom line, the home we ultimately bought, would have been close to unaffordable for what we wanted to pay at it's current "appraised" value. We don't care because we don't plan to move for awhile, but I'm glad she talked me into it. If we had waited until we were married, we'd be looking at smaller house/smaller lot/further from work, or all of the above ( unfortunately when housing prices rise 20%-30% in a few years.... a 5% raise doesn't quite cut it). I guess my point is, the folks on this board give great advice for the most part, but at the end of the day you two need to sit down and look at the numbers, decide what amount of risk you are comfortable with given your combined plans for the future, and make the best decision you can (without knowing the future). I just wanted to provide an alternate point of view. Best of luck.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by nimo956 » Wed Sep 07, 2016 12:49 am

Buy a bigger house with your parents that the 4 of you can live in comfortably. I'm only half kidding. The thought occurred to me while reading this post, but why isn't there more multi-generational living arrangements in this country, given the high real estate prices in many cities? Why does every individual need their own house to themselves?
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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by JerseyBoy » Wed Sep 07, 2016 12:50 am

Have you tried making your own calculations as to how expensive a house you can afford rather than just relying on a bank's recommendation? There are probably several places online (try bankrate.com) where you can input your available downpayment and salary information (one or both) and then get an estimate of what mortgage you can SAFELY afford. The old rule of thumb was not to spend more than 28% of your monthly income on housing expenses (principal plus interest plus real estate taxes plus utilities). Try making this calculation and use the number you come up with to determine where in the Denver metro area you can afford to live. P.S. I recall that Aurora was a reasonable (price-wise) place to live in the 1990's. Good Luck!

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by stlutz » Wed Sep 07, 2016 1:16 am

How much homebuilding is going on in the Denver area? Not perceptions but actual data? And how does that compare the number of people moving into the area? Ultimately prices will depend on supply and demand--if supply isn't keeping up with demand and isn't going to, then prices will get more reasonable. On other other hand, if the plains east of town are being filled up with houses, then prices will probably come down, at least in certain parts of town.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by blaugranamd » Wed Sep 07, 2016 1:30 am

Leemiller wrote:Buying a home with someone you aren't married too can be a huge, huge legal mess should anything happen. I would never do that.
This. Not to be all conservative, but if you're not committed enough to buy a wedding ring, you're definitely not committed enough to get into hundreds of thousands in debt together. Unless you're considering only yourself on the mortgage, in which case you should ignore her income in your planning entirely.
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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by boglephreak » Wed Sep 07, 2016 1:45 am

flyingbison wrote:
boglephreak wrote:
flyingbison wrote:
boglephreak wrote:my friend bought a house with her bf. then they broke up. then they had to sell the house in a buyer's market. it was bad. i would not buy a house with a gf.
I bought a house with my first wife. Then we got divorced and had to sell the house for less than we paid for it.
so you had the protections afforded to people who are married, not general civil litigation over who said what and promised what under bastardized versions of contract law. we have a whole legal system developed for those who choose to get married. it is expensive and time consuming, but not nearly like a contentious lawsuit between unmarried people.
Your post had nothing to do with contentious lawsuits, it was about a couple who broke up after buying a house together. And if you think that the "protections" afforded to married people prevent contentious lawsuits, I'm guessing you haven't been divorced.

I'm curious to know what legal protections I had when I was married (regarding the house) that I do not have now.
i didnt feel the need to express their life story. it was a contentious situation exacerbated by teh fact that they werent married, just dating. "it was bad."

married people have legal protections by law. there is a whole field of law related to marriage and divorces (most especially community property states), including specialized attorneys. that same thing is not present for unmarried people. i never said divorces arent contentious. there are rules and presumptions that married people have that daters dont.

i am not sure why this is a disputed issue.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by bottlecap » Wed Sep 07, 2016 5:56 am

I'd consider moving. Your wants, such as a job with flexibility and travel time and a house with a yard, don't jive with the Denver market. You are competing against two income families in their 30s to buy these homes with a yard to play in. You can't out-spend them. And if you buy a $300,000 house, you won't have money for travel.

I would also be hesitant to buy a property with another person unless I was okay with making the majority of the payments and getting no more than 50% when we sell. Because that's what could very well happen.

JT

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by sunny_socal » Wed Sep 07, 2016 7:58 am

Do it right:
1) Marry the girlfriend
2) Continue living @ parents house; Rent if you can't do that
3) Pay off her $50k debt
4) Save up for the down payment (20%)
5) Buy the house

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by junior » Wed Sep 07, 2016 8:31 am

boglephreak wrote: married people have legal protections by law.
So do people with clear contracts.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by BlueCable » Wed Sep 07, 2016 8:39 am

Here's something to make you feel better about renting when people tell you that you are throwing your money away. I've been in my first house for a little over two years. At about the 2 year mark, an important system in my house failed forcing an expensive repair. The final cost of this repair was over 15 months of mortgage+tax+insurance payments.

If the house you can afford is an older house, you must be ready from Day 1 for these kind of maintenance costs.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by CoAndy » Wed Sep 07, 2016 8:49 am

sunny_socal wrote:Do it right:
1) Marry the girlfriend
2) Continue living @ parents house; Rent if you can't do that
3) Pay off her $50k debt
4) Save up for the down payment (20%)
5) Buy the house
This. I would not be in a hurry to buy, but prepare yourself accordingly to jump on any upcoming opportunities (and they will be coming).

I bought a house in April 2014 in Littleton and it appraised for $292k. It now appraises for $365k. A $73k increase in about 28 months. You sell in this market, not buy.

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by snowman » Wed Sep 07, 2016 10:24 am

sunny_socal wrote:Do it right:
1) Marry the girlfriend
2) Continue living @ parents house; Rent if you can't do that
3) Pay off her $50k debt
4) Save up for the down payment (20%)
5) Buy the house
This would be my advise as well if you were my son. I would not entertain buying right now in your situation.

You also may not fully realize how much time and money is required to maintain the house, let alone fix things as they break up. You could find yourself in a situation where you may not have enough cash to replace furnace/AC/roof etc. 2 years after you bought the house. I would not rush into home ownership if I were you just so your dog can have nice backyard, and frankly I am somewhat surprised you are getting that kind of advise from the people surrounding you.

As far as Denver's super hot market, it's only super hot in the market segment you are looking at - starter homes near downtown in the high 200s-low 300s. There aren't enough of them, and the builders are mostly building houses in the 400-500+ market segment, so the shortage on the low end is likely to continue for awhile, which will also keep rent prices high. My point is that if you were in a position to buy today, you would find much better values further out where many areas are becoming (or already are) buyer's market.

One last point to consider. Demand for low end housing in Denver is so high many properties sell "as is" or even without inspection to the highest bidder. People move in with already stretched monthly mortgage payments only to find out numerous things need to be fixed/replaced. Now imagine this happens to you - not pretty. Now imagine that at the same time you lose your job - what do you do? Ask parents for money? Or sell at a potential loss?

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Re: Need Advice... Girlfriend and I are looking to buy our first home in Denver (super hot seller's market)

Post by flyingbison » Wed Sep 07, 2016 10:48 am

boglephreak wrote:
there are rules and presumptions that married people have that daters dont.

i am not sure why this is a disputed issue.
If my partner and I split up, how will our house be treated differently than if we were getting a divorce?

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