“The past exists only in our memories, the future only in our plans. The present is our only reality.” — Robert Pirsig

SoldI’ll preface this now: there isn’t anything hot about this week’s Sleeping with Money story. Sorry to disappoint. I have other steamy episodes, but this wasn’t one of them.

I dated Robin for about a minute but at times seemed like an eternity. I think from start to finish it lasted about six months. I was living in Atlanta at the time and was in between Partner #1 and Partner #2. I was in my late twenties and coming off a two year stint at being self-employed… or trying to be self-employed is a better description.

At the time, I was in business with a friend and former colleague and it just wasn’t panning out. The friendship was fine, but the business was a huge disappointment and I was struggling financially. I needed to make a decision… continue to try to make the business work or declare it a failure and get a job. The latter happened with some family coaxing and the last decade hasn’t been too shabby with my career choice. No complaints. Of course, I still fantasize about owning a franchise someday.

Back then… I was literally dollars away from living in my car. And that too was on the brink of breaking down at any moment. So there I was in the process of making a career transition and trying to get my income back on track and I was dating Robin who happened to be a finance geek. I never quite understood what she did for a living. It had something to do with putting together financing for commercial real estate transactions. That was the extent of my understanding, but fair enough to call her more of an expert when it came to money.

Aside from our very vanilla sex life and zero romance… she didn’t have a candle in her house or if she did, never lit one. Cuddling was out of the question plus she had this yappy dog and bad taste in home furnishings. Our relationship was just wrong any way you looked at it. Total mismatch and I finally told her it wasn’t working for me. She’s the only person I ever cut loose. With everyone else, I’ve always been the dumpee.

But here’s what I learned from sleeping with Robin: we had frank discussions about money and how I could get my life back on track. Of course, these conversations never happened after amorous love making, but most likely after I spent a Sunday afternoon helping her rip out her back yard. I got financial advice and she got a sturdy German girl that dug up bushes and tore out old fencing.

I remember one conversation where I said to Robin that I wanted to get a job and then finally buy a house. She looked at me like I had a third eye and said that I wouldn’t be able to do this for a long time. She was the first person that ever explained to me the “house buying” and “financing” process.

Of course, I wanted to know why I couldn’t buy a house for a long time. I wasn’t in debt. I just didn’t have any money. But I had excellent credit. She explained that I needed a 2-3 year work history or cash but without one or the other there wouldn’t be any way that I could qualify for a loan.

Her advice eventually didn’t apply to my situation because within a year after breaking up, I ran off to California with Partner #2 and bought a house. Partner #2 had the down payment. I had a job at this point along with the stellar credit. I wouldn’t recommend buying a home with a person you’ve only known less than a year, but that’s a story for another post. Crazy lesbians!

Back to Robin… how would I know when I was ready to buy a house? Well, here is a list of questions from HUD.

  • Do I have a steady source of income (usually a job)? Have I been employed on a regular basis for the last 2-3 years?
  • Is my current income reliable?
  • Do I have a good record of paying my bills?
  • Do I have few outstanding long-term debts, like car payments?
  • Do I have money saved for a down payment?
  • Do I have the ability to pay a mortgage every month, plus additional costs?

They say that if you can answer “yes” to these questions, then you are probably ready to buy your own home.What Robin didn’t tell me was that there were ways around my lack of recent and steady employment history. She was right about needing cash. I still needed a down payment but she also didn’t explain the difference between going to a bank for a loan and using a mortgage broker.

Over the last decade, my mortgage broker has been the most important advisor in my life… she’s been a better resource for me than my accountant, financial planner, or any real estate agent I’ve ever used. My mortgage broker taught me everything I know about the real cost of borrowing money and debt to income ratios.

Credit Infocenter provides a good primer on mortgage brokers. They write, “A broker is your only option when you have less than perfect credit, are self employed (and can’t prove your income), just switched professions or have a high debt load.”

“Mortgage brokers can get you a loan when the banks just aren’t interested in the hassle. But you will pay more in both fees and interest rates for getting your loan through.”

“A bank is the best option if you have top notch credit, steady job/work history, low debt loads, are self-employed, but your last 2 years of income tax returns easily prove your income.”

Back then, I had a non-traditional situation and Robin wasn’t thinking outside the box, but as a finance person, her view was black and white and focused on the common facts. Had I stayed in Atlanta, I believe I would have done some digging and my own research about how to buy a home. At the time though, I was too busy digging that hedge out of her back yard. I’m glad I moved on!