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.