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Dear Penny: I Hate Roommates, but They Could Really Help With My Mortgage

A small house surrounded by trees and shrubs with a small grass lawn and and sidewalk in front.
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Dear Penny,

I just bought my first house. It's small, but it’s perfect for me. I have the option of bringing in a roommate for some extra income. The past has proven that I don't do well with roommates, but I could pay about $7,000 extra toward the mortgage principal in my first year of homeownership with the income that a roommate could provide.

If I don't bring in a roommate, is it smarter for me to apply my extra income to the principal every month to pay off my house faster or to put it into places like stocks or my savings account?

Thanks,

New Homeowner


Dear New Homeowner,

First, congratulations on buying a home! I notice you said that it’s a small house, but perfect for you. You didn’t say it’s perfect for an eventual bunch of toddlers, or perfect for you and six rescue Labradors, or perfect for the parade of houseguests throughout the year for all the entertaining HGTV insists you’re going to do.

You say it’s perfect for you. You also mention that previous living situations with roommates have not exactly been peachy.

So why consider one now? You bought this house for you — without an explicit plan to take on a roommate or three so you could afford it more comfortably. It sounds like you’re feeling just a hint of buyer’s remorse. I’m not saying you regret the choice, but you might be feeling a nagging sense of “Should I have thought of a better backup plan?”

If you don’t love the idea of having roommates, you need to make sure you are your own backup plan. Shore up your savings account so you can comfortably pay that mortgage bill if you find yourself out of work for any length of time. Then put more money into your retirement savings so you have peace of mind down the road, long after the house has been paid off.

If you plan to stay in your house for many years to come (say, the length of your mortgage), don’t feel pressured to rush through the mortgage payment process. You’re allowed to go at a normal pace while making sure your finances are well-rounded for your long-term comfort.

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