Reality bites

Herewith, the tale of a maiden cast aside. And the lessons flowing from it.

Hi Garth. Long-time reader for 7 years. I’ve commented a bit before and have written you once or twice as well. Keep doing what you’re doing, it is my sanity on a daily basis.

Feel free to use anything I say for the blog if you think it could benefit others.

I started 2018 living with my common law spouse and our 3 month old baby girl in a duplex that we bought and took possession of July 2017. I’m an employee of a maroon institution, presently on maternity leave. I’m set to return to the bank end of September in a senior NL@TB role behind a desk.

The irony is that I’ve read your blog 7 years and have even been preaching your advice at the bank when I have youngsters (I’m 32) come in looking to buy with a nothing down payment. I am ‘Belinda the Good Witch’ version of TNL@TB. Which is why I don’t know if I can return to such a high pressured, soul destroying job when maternity leave is finished. So while my employment is technically secure, the guarantee of me returning to it is not.

My common law spouse decided he wanted out of the relationship in March. We had no right buying our home – classic case of it being financed by the bank of his mom and dad. We each contributed a measly $10K towards the $75,200 downpayment. My $10K came from my RSP – put it into the S&P500 index around 2012 thanks to the blog. Thank for you that advice!

His parents lent us the remaining 20% down + closing costs and we have been paying them interest only on the loan ever since. Our financing was only able to be approved with my father-in-law on the lending portion with us, though my ex and I are the only two on the lien. Despite my knowledge of most things financial I agreed that it made sense to have 65% of financing as a line of credit and 15% as a 3 year VRM.

As you can imagine, we have been paying interest only on all of these debts for the past year. As such, we basically owe what we originally borrowed. Because of my in-laws interest in the property, the break up was a one two punch… not only was the relationship over, but he then told me that our daughter and I would need to find another place to live. Oh, and the SUV that he had been leasing beyond his means that we had been using as a family car – he was getting rid of that ASAP and driving his work truck instead. So I was without a vehicle.

Ex is terrible with money in general. Invests in cryptos… self employed… I don’t know what child support amount will be yet. It will need to be determined from a disclosure of financial statements from him and his company I think. Garth — this is so long. I’m sorry. It’s pretty scattered. Also sorry about that. I’ve wanted to write you since April this year about this and only now am able to wrap my head around doing so.

Final note – in terms of living… we are going to stay with my mom for a bit I think. Will be staying here as long as my name is on the property and mortgage, though. I am thinking of applying to subsidized housing in the interim as my income tax return will qualify. From there the plan is to live frugally and possibly buy around 2020/2021 after prices and gone down and rates have gone up.

Thank you Garth! Your loyal disciple, Belinda.

Lessons for Belinda (and everyone):

Never, ever, buy real estate with another person unless you have a stable relationship, and proper legal protection. (I could say the same about having a kid – but that’s not this blog’s thing.) In this case you gambled, lost and may be destroyed as a result.

Never, ever accept a loan from in-laws, friends or anyone else without getting it lawyered. Better yet, don’t do it at all. Nothing is free. Money changes everything. You are homeless because of it.

Never (obviously) buy a property you can’t afford. You’re scraping the poverty line, on mat leave and yet agreed to 95% financing for this duplex. Renting would have been such a better option, partly because you decided to live with a moron.

Never finance a property with a line of credit, which can be called at any time, and a variable-rate mortgage when interest rates are rising. Not only are debt service costs increasing routinely, but once the lender learns of your changed circumstances, it could be all over.

Finally, you muse about buying again in two years. Have you been seduced by maroon penguins? Did you not just learn what real estate can do to your relationship and circumstances? You have no money. You’re steeped in debt. You owe big on an asset you don’t possess. Have you learned nothing from reading this pathetic blog for the past seven years? The biggest obligation in your life is that child you created. The goal is financial security, not a house – which will impoverish you. And next time choose a better dude.

Lessons for the rest of us:

If you think TNL@TB has all of the answers, think of Belinda.