We Bought a House (We Hope)

This morning, I found myself in the extremely unexpected position of convincing a mortgage broker halfway across the country to pre-approve me and my boyfriend for a $155,000 loan.

First, I should say—it’s the house that did it. A beautiful red house divided in two units, with a big yard, tucked right in the middle of downtown Ann Arbor. I could walk to my grad school classes; if Andrew got a job at an architecture firm in the area, he could walk too. Our manic sheepdog could play outside without suffocating thickly in her own dense white fur, which is what happens every time we run her around in the face-melting, all-seasons heat of Texas. We could rent the one-bedroom unit and live in the two-bedroom! Guaranteed extra income! Perhaps even a profit!

A smart financial decision, this $155,000 loan.

“Are you married?” the broker asked. “Or engaged?”

“We could be,” I said, quickly sending Andrew a message online. We could run down to the Houston courthouse tomorrow and make this official, he wrote back, adding hahahahahahahahaha.

“It’s fine if you’re not married, you’ll just have to apply separately. That means I need both of your tax returns from the last years, plus all your W-2s and 1099s, plus your bank statements and last two pay stubs.”

“My boyfriend just finished three years of graduate school,” I said, “and I was in the Peace Corps. And now I’m a freelance writer and he’s working part-time while looking for a job in Ann Arbor. So if we send you the last two years of our tax returns, it’s going to look like we don’t have any money at all.”

“I see,” he said. There was silence.

“We’ve got perfect credit and neither of us has ever been unemployed,” I said. “And we both have some savings?” 

This may not work out for us.

But, having recently ghostwritten a book about the post-recession changes to the real estate industry, I feel certain that this mortgage wouldn’t be a completely terrible idea. In general, now is a very good time to buy property, with rents rising and house prices continuing to fall. Check your own apartment on Trulia and see if your rent and utilities wouldn’t cover a mortgage payment—in a lot of places, it would. The house Andrew and I were looking at sold in 2006 for almost $270,000 and now it’s selling for $155,000. Because we’d be first-time homeowners and owner-occupants, we’re eligible for several programs that would make purchasing a home almost absurdly accessible, even to two individuals who rent for $475/month (all you broke folk, move to Houston) and don’t even own a bed frame. Under Fannie Mae HomePath and FHA loans, you can make a down payment as low as 3%. We may buy store-brand chickpeas, but 3% of $155,000? We could do that. That is what we’ve been eating all the store-brand chickpeas for.

Of course, the general state of global and national finances make it sort of impossible to bank on the rapid asset appreciation that made a home such a good investment in previous decades. And naturally there are other things to think about: interest rates, taxes, maintenance, whether or not you think we are facing a financial (or Mayan) Day of Reckoning in the near future and should just sell off everything, move to a foreign wilderness and live in non-consuming peace. And what have the years since 2008 taught us stupid, poor millennials, except for the fact that DEBT IS BAD?

Debt is bad. Through a combination of good fortune, familial support and careful personal management, Andrew and I have previously been able to operate as if we were allergic to it. I became financially independent at sixteen after watching my parents’ finances collapse, and while I’ve made plenty of reckless money decisions (mostly of the imprudent-but-awesome foreign travel variety), I have managed to strenuously avoid debt through a combination of scholarships, research fellowships, waitressing, mint.com, and never turning down a freelance project. Andrew is even more prudent, wearing baseball T-shirts from middle school, and carefully investigating price per ounce at the grocery store.

He’s been a good influence on me, and I’ve traded my easy-come-easy-go approach to money for a more stable one—one that allows for a better, more practiced recklessness. Because we live in a tiny place, bike everywhere and cook dinner at home almost every night, we are able to enjoy three serious privileges that don’t normally exist together in today’s world. Being cheap allows us to (1) do exactly what we want to for a living (him: small, community-based architecture, me: teaching and writing fiction), (2) work on flexible schedules that allow us to have a real and largely stress-free life, and (3) spend our free time exactly as we please, getting drunk on weeknights, traveling around the country to see our friends, slumming at SXSW, impulsively deciding to drive to Charleston and back for a wedding.

We have also, very luckily, been able to sidestep the nonstop speculation about the current value of every non-accounting, non-engineering, non-consulting-conducive degree. Andrew and I have both just gone for it, jumping on opportunities too good to turn down: he got his Master of Architecture at Rice, I’m getting an MFA in fiction writing at the University of Michigan, all of it debt-free, even decently paid. I genuinely don’t care if my degree ends up being useless; I’d rather know that I never worked till 1 a.m. without enjoying every second. With no debt, we are content with the idea of staying at a moderate income level for years; we are ambitious first in terms of happiness, second in terms of work, not at all in terms of money, and I wouldn’t trade this lifestyle for anything.

But I realize that everyone’s idea of adulthood looks different. A few weeks ago, I was at dinner with my best friends from high school, talking about old classmates of ours who’d become stay-at-home mothers. We discussed how terrible it would be to clean up after children all day, and one of my friends said, “Well, we all have maids who clean our apartments now, right?” As they all nodded automatically, another one interjected, “Well, except Jia!” They laughed—they don’t understand how Andrew and I live, why we wash our dog ourselves, why we’re not interested in money or cachet, why I don’t care about getting married, why I’d rather have scuffed-up nail polish than pay someone $25 to do it every Thursday after work.

What I’m saying is, until 24 hours ago, I thought that there was nothing that would convince me to spend an extra hundred bucks each week, let alone put myself in six figures of debt for a duplex in Michigan.

But then last night we realized, if we’re already resigned to throwing $40,000 down the drain in rent money over the next three years, it wouldn’t hurt to at least window-shop for real estate. So we started looking on Trulia. And then we saw that beautiful little red house on the market for $150,000. And then we started laughing like maniacs, because all of a sudden the future seemed like a huge surprise, full of steps skipped and scrambled, and more fun than we’d ever imagined. A house, a mortgage, still no bed frame; a yard, another dog, debt serving the function of a ring; parties as destructive as we want them, and on the walls, we could paint anything.


Jia Tolentino is a writer and real estate tycoon, in transit from Texas to Michigan.


29 Comments / Post A Comment

Good read. Also: Aaaa, home stuff. It’s been on my mind lately because our nice little old lady neighbor passed away and her family is just rushing to sell her home ASAP and have it listed for WAY less than its worth, like 2/3 what we paid for ours just two years ago (which was already a pretty good price for our area!). And even though we’re not planning on selling our house any time soon, it’s jarring to go on Zillow and see our house estimated at several tens of thousands less than we paid.

@Leon Tchotchke Apparently though this means we can get our property taxes reassessed and probably save a bunch of money there? So that part’s not that bad.

j-i-a (#746)

@Leon Tchotchke Reassess! You might as well get something out of an anxiety-inducing Zillow situation. I bet those taxes are exactly why your old lady neighbor’s family is trying to get the house off their hands so quickly?

j-i-a (#746)

@Leon Tchotchke Also…. your username. Pretty fantastic.

lalaland (#437)

Such a great story, thanks for sharing and congratulations (hopefully) on the house!

I live in a large city that makes home ownership pretty impossible, and nor do I particularly want to own a home in this city, but I think about moving to a small town and buying a little house with some land and a couple of dogs…only thing is I don’t know what I’d do job-wise out there. Not to article-jack, but suggestions?? Thoughts from people who move from a big city to a small town?

@lalaland We moved from The Big City to a relatively distant suburb which is very small town-like, but both of us already worked in the surburbs by then so it made sense? There’s an awful lot of big companies based near small towns, but I feel like it’s probably hard to pick the small town first and THEN try to find the job. I think most people who make that move do it in the opposite order.

probs (#296)

@lalaland many of the jobs in the “creative internet economy” or whatever the hell one calls blogging, article writing, graphic design, etc. type work could be done remotely from a small town, and the money would go way farther. Also, if you don’t mind a commute and if you can find a place that isn’t too much of a bedroom community, you could continue to work a city job while living in a small town. Those are big ifs, though.

j-i-a (#746)

@probs Big ifs but totally viable! @lalaland You could also consider relocating to a big city (like the profitable, steaming, industrial grunge-land delight that is Houston) where you go seven miles from downtown and suddenly you can buy a lot of land at reasonable prices. And lower costs of living really do make for a lot of job freedom, too–I would never have been able to sashay into the aforementioned creative internet economy so easily if I wasn’t in a place like this.

lalaland (#437)

@j-i-a Sigh. I am from Houston. My parents constantly ask me when I plan on moving back. It’s a lovely city, really it is, in many ways, and I will defend it to the death, but…I kind of don’t ever want to move back. Also, my allergies are horrible there and I think I might be allergic to it.

j-i-a (#746)

@lalaland H-Town! Yeah, I feel the same way. I have been so glad to live here for the last year, and I think as a city it offers a ton of advantages (great economy, insane food, cheap living, ice house bars, diversity, etc) but my skin crawls at the idea of Houston for life. Too hot. Too flat, too sprawling, and I’m sure you’d agree that it’s worse having grown up here and sort of maxed out on local pleasures. And the allergies are no joke in this city–and they only get worse!

probs (#296)

Best of luck!

Good article. It makes me want to shape my finances even more (as in more motivation, not that I’ve already whipped them into shape even a little bit).

I’m supposed to close in 2 weeks and 2 days, and I feel like I just keep hitting snags, so I hope it goes more smoothly for you!

omgkitties (#206)

I was in a similar place a few months ago – thought ‘hey maybe I should think about a home in the future?’ and (thanks to a crazy low price which meant very little money down, and which I could surprisingly afford) was in escrow a month later. Fingers are crossed for you!

AnnieNilsson (#406)

Aw, this was great! Beautifully written. And close to my heart too, as four years ago, when I was getting my MFA in writing we made the same calculation and decided to buy the sweetest little house in our little college town and it was a freakin’ fairy tale. Cheaper per month than renting too, even after taxes and insurance.

We had no real furniture, but we cobbled things together from the awesome Mennonite thrift stores outside of town, and went about living like two regular stipend-funded grad students: eating generic chickpeas, drinking at the (so cheap!) local bar, etc. But the fact that the house was all ours, and we could paint the rooms crazy colors and build a chicken coop in the back and never have to worry about a mean old landlord just felt so damn good.

I will say this though, we figured it would be easy to sell when we left Iowa, but that hasn’t really been the case. We are renting it out now while we live in LA, and the future is uncertain. Though perhaps since you plan on renting out one side of it anyway, this won’t be a huge issue for you, since if it doesn’t sell right away you can simply rent out the side you were living in when you leave?

Either way, good luck. Very exciting!

j-i-a (#746)

@AnnieNilsson It’s so, so nice to know that there are people who made it work in similar circumstances. Your decision to buy sounds amazing–beat-up, Mennonite-vetted furniture, animals in the yard, and walls of all colors comprise a large percentage of my Ideal Graduate Working Environment. And Iowa, eh? At least you know that IWW will never suffer from a lack of aspiring, brilliant and well-placed individuals who will want to rent a cute house–or maybe even buy it!

Very exciting! Brokers can get pretty creative these days. I’d recommend calling a few-I was able to get us a lower interest rate than initially offered and an extra $1000 in closing credits with a few hours of negotiating over the phone. And we’re on our third refi in 6 months after keeping in touch with all the brokers I initially contacted.

1) MFA at UM = awesome. The English department in general has wonderful, wonderful events.

2) WELCOME TO ANN ARBOR!!! There lots of great things to do here. Let me know if you need any recommendations for places to eat, drink, or wander!

j-i-a (#746)

@Nina B.@twitter Thank you! I’m so excited to move. What are your favorite places in Ann Arbor? And will I be seeing you around at English dept events?

@j-i-a Unfortunately, I have just graduated and will be leaving Ann Arbor in August. :( So no English dept events for me.

– Coffee/Teahouses: Mighty Good Coffee, Cafe Ambrosia, Comet Coffee, Crazy Wisdom Bookstore

– Food: Frita Batidos, Jolly Pumpkin, Mark’s Carts (food carts), Seva, Madras Masala, Sparrow Market’s lunch counter in Kerrytown, Marnee Thai, Conor O’Neills, Pita Kabob, Earthen Jar (vegan! Indian!), Iorio’s Gelateria

– Brunch: Fleetwood Diner, Cafe Zola, Angelo’s, Northside Diner

– Bars: Ashley’s, Dominick’s (try Constant Buzz!), Jolly Pumpkin, Cafe Habana (will reopen this year, has salsa nights!), Heidelberg

– Fun Independent/Used Bookstores to Explore: Common Language, Dawn Treader, Aunt Agatha’s (only mysteries), Kaleidoscope, Crazy Wisdom, West Side Book Store

– Places to catch a concert: The Ark, The Blind Pig, Kerrytown Concert House, Hill Auditorium, Power Center

– Things to See: The Arb, UMMA, the Law Quad, Farmer’s Market, 826michigan (amazing creative writing tutoring nonprofit!), Russayog, Gallup Park, the few buddhist centers in the area.., Selma Cafe

Hope you grow to love this place!

PrimarySource (#753)

Thank you for this! I’ve been going through the same thing over the past week and dutifully assembled my own collection of W2s, pay stubs, etc. so that we could qualify for an FHA Homepath Renovation Loan. My boyfriend and I are not engaged or married, either. I signed our paperwork today to put in our offer only to hear back a few hours later from our realtor that someone else had also put in an offer. And now we have to get into financial fisticuffs and put in our “best, highest offer” to beat the other party. I just want my farmhouse, people! Let me have it! Good luck to you as you buy your house – it truly is maniacal, terrifying, and exhilarating, isn’t it?

j-i-a (#746)

@PrimarySource Wow–good luck to you too! I think that my main amigo and I have hit the fundamental snag of not being able to get a good loan until he’s gotten full-time employment in Ann Arbor, which in a way is sort of a relief, putting it off for a few months–although I’ve been bitten now and keep browsing that HomePath website. It’s so crazy, how quickly it can happen. I hope you get your farmhouse.

sony_b (#225)

@PrimarySource Be careful of the “best highest offer” – a bank just did that to us – and we were essentially bidding against ourselves. We called their bluff and got the house for only 2k more than our original offer instead of the 50 they were hinting at.

PrimarySource (#753)

@sony_b That’s crazy! We’re pretty sure there was another offer, but we didn’t up our bid tremendously. Definitely not $50k! And they accepted today, even agreeing to pay all closing costs because man, oh man, do we not have the cash for a down payment AND closing. How so many people manage to buy houses is beyond me – this is hard stuff. Now we’re on to the home inspection part and we can get out of it if the results are not to our satisfaction. Hooray!

sony_b (#225)

@PrimarySource Congratulations! We did the same thing with closing costs. It’s still going to be tight and we need to redo the floors in the whole house before we can move. All kinds of fun!

Lila Fowler (#754)

Jia! I was a big fan of Best Little Bookshelf in Texas(started by reading your PC articles when I was in the PC app process) and am so happy to see you writing here. Good luck to you and your boyfriend!

j-i-a (#746)

@Lila Fowler Back when I was a little Sweet Valley reader, having Lila Fowler come to life and acknowledge my existence was the literal subject of many an early, awful short story of mine. Let alone having Lila Fowler give me a compliment! Peace Corps Lila (or non-PC Lila, if the app process did you in with its 20 months of torture) you are making all of my dreams come true.

sony_b (#225)

We’ve been trying to buy a place in the SF Bay Area (Alameda, Oakland, or San Leandro) since January and have had 8 offers rejected or just ignored. Last week I found the best way to get an offer an an REO countered and accepted – go to India! Seriously, the 12.5 hour time difference, and the fact that I am in India trying to work a tech conference and boyfriend is at home have made for an insane week. We should be in escrow within the next 24 hours, unless Bank of Schmamerica does something else completely ridiculous.

A word of caution to folks thinking about this stuff – be very careful about your agent and your mortgage broker. I could do a whole post on the completely unethical and illegal shenanigans we’ve seen in the last few months. (Mike, Logan, want one?) The SF area and NY are both extreme markets, but there are a lot of agents, brokers, and bankers everywhere with absolutely no ethics who are counting on the buyers to be clueless, desperate, or so in love with a particular house they’ll do anything to get in it. Including bid waaaaay past the comps.

Not to mention there are some realtors out there who are nice, but just plain idiots. There are fantastic realtors as well, but they are harder to find. Try to get referrals if you know anybody who has bought in the last 10 years in the area where you’re looking.

@sony_b Ugh, idiot brokers are the WORST. I felt like a MORON seeing how much the chucklehead we used got from the sale considering how useless he was throughout the entire process. There was a screwup by our agent at pretty much every single step, not to mention the fact that my wife found every decent home we looked at since all the agent seemed able to find were foreclosures halfway through renovation and stuff that blatantly didn’t meet our (super easy) criteria.

sony_b (#225)

@Leon Tchotchke They really are scary. I met my agent in 2003 when I bought my first condo. She was literally the 12th agent I tried to work with. It was when everything was booming in the bay area, and I was making about 70k at the time. The first 11 agents I tried refused to show me anything under 400k – insisting that I “made enough money” and I thought they were insane. Anne got me into my studio at the beach at 210. I’m still massively underwater on it now, but that’s not her fault. I’ve referred several friends and they were all happy too. She was my first call when we were ready to start this time, and she’ll be the first call when we’re ready to trade up in a few years too.

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