economic climate

The current economic climate has resulted in many people trying to find ways to save money or increase their income. One way of doing this which many people don’t seem to have thought of yet is the possibility of renting out a spare room in their home. Making ends meet isn’t the only advantage to this either. Opting for a roommate could potentially help you to pay off your mortgage sooner.

If you have someone equally sharing expenses with you, your savings increase significantly on a monthly basis. You may not feel comfortable with the possibility of sharing your home with a stranger, but by talking to family members or friends you may find someone who is also considering how to save money on their housing costs. Sharing of other expenses as well, such as utilities, food and even driving back and forth to errands can help you save even more, enabling you to possibly make larger payments on your mortgage.

Although having a roommate may not be what you had in mind when you started out, it’s really not all that bad. It can actually be advantageous both financially and socially. Of course there’s the privacy issue, but with some ground rules set from the beginning everyone should adjust easily without too much trouble. The key is to make a list of what you will and won’t accept in a roommate before you start looking. Because you are getting a roommate for a bit of financial ease, you want to be sure you really are getting what you bargain for.

The person you choose must of course be able to live up to their financial responsibilities. It is your absolute right to ask for references, as well as to perform credit verifications if you are willing to spend the money for that extra peace of mind. Only after you are sure this potential roommate is a financial fit should you concern yourself with the social aspect of having someone sharing your space.

What this all breaks down to in the end, is money. Let’s work with some actual figures to give you an example of what having a roommate can help you achieve financially.

Your mortgage payment is $1000 per month. Add to that your utilities (telephone, cable, heating and lighting) at $350 per month and homeowner’s insurance at $200 per month. That gives you a total of $1550 out of pocket each and every month. And that is before you have eaten or started you car – let alone bought any new clothes, seen a movie or gone on a date.

In comes your new roommate. Yes, you have finally found the perfect roommate after searching and being very picky about the entire process. After all, this is your house to begin with. You and your new roommate have agreed they will pay you $700 per month to rent your spare room and share all common living spaces. Not only is that half of your mortgage payment, but it completely covers your homeowner’s insurance as well.

This doesn’t have to be a “forever” solution. Eventually you and your roommate will part ways as life moves on, and the economy changes. But it’s a fantastic temporary solution which can not only have you paying down your mortgage sooner, but you may just make a friend out of it at the same time.