Re: A question about real estate, home purchases a... - Page 6

foundinlv · ‎04-20-2012

There are so many people who want to pay cash for a new home it is excluding first time home buyers who can't afford to do the same. Banks don't want to finance someone if they don't have to. This was in our local news just the other night.

pistolino · ‎07-04-2011

Kathypet, my concern about your daughter standing on her own 2 feet doesn't come from a hateful place. I know you have nothing but the best intentions for her and your grandchild.

That said, it kind of enables your SIL to continue working intermittently - and this isn't good for either of them.

I know you said she will "get it all" when you two die, but these days because people are living longer and sicker, there may be nothing to get in the end.

My mother had Social Security, disability and retirement savings and by the time she died she was destitute because she needed care for years before she passed away.

If you get a mortgage on the property and you or your husband develop Parkinson's or
Alzheimer's or another chronic disease that goes on for years, and coupled with that your daughter suffers an economic setback or a medical issue herself, that mortgage will be hanging over your heads.

While there are certainly good things about this, like having your grandchild nearer to you, you have to imagine if the worst happens and what impact that mortgage would have to all of you.

olive59 · ‎09-25-2011

How nice it is tyo see so many varying opinions and everyone being so respectful of them all! These types of threads are quite enjoyable to participate on! Being in the lending business for many many years I want to 2nd what another poster commented on earlier. There are SO MANY hoops to have to jump through these days to qualify for a loan. Some make sense, many others absolutely do not and were just implemented as a knee jerk reaction to the housing meltdown in 2005/2006. If your son in law and daughter can afford the payment I wouldn't be concerned about his job history. If they struggle with their budget now then off course that would be a red flag. I know you will make the decision that is right for you and your family and your adorable grandson.. Good Luck!

barrel racer · ‎03-13-2010

On 5/16/2014 shoekitty said:
Kathypet

I would do anything for my grandkids. Anything.

You and me both shoekitty. My home is paid for and in a trust for my Granddaughter.

------ · ‎03-10-2010

I didn't read through the replies so I'm sorry if I'm repeating anything.

You have to remember that you won't receive the exclusion on your taxes since you, the owner, are not living in it. If your daughter is paying you rent I believe you will need to pay taxes on what you receive.

Lipstickdiva · ‎03-10-2010

I know this isn't really my business but just thinking out loud, I don't understand why, if they want to move closer, can't they just rent a house nearer to you?

We see so many people at the firm I work for in a financial mess because of things like this. Parents co-sign for loans and the kids don't pay, parents are stuck with loan payments they really can't afford to make because they were trying to help their kids out, etc.

BellaPaprika · ‎03-09-2010

Kathypet, your thread reminds me of another thread about a year or so ago. I don't recall the poster who started that one but it was a similar scenario and they eventually were informed by their financial adviser that it was a very bad idea for them.

Anyway, I understand your wanting the grands near you but is that maybe a bit of you orchestrating your daughter and sil's life? I'm not meaning to be snarky but your good intentions are also self serving and maybe not doing your DD and SIL the biggest favor in the long run. Your SIL needs to figure out how to fix his financial issues and be an equal support in his marriage. Your bailing them out is not going to do that. If it were a case of your grandchild becoming homeless I could certainly see you and your husband helping them with housing but it doesn't sound as if that's the case. If SIL is no ball of fire career wise, your gift could be all he needs to just sit back and wait for more. Once you've done this for them, what if they can't make the monthly payments due to an unforeseen illness for your daughter?

We're all living longer and no one knows what tomorrow will bring and with your names on the mortgage you could find yourselves paying that mortgage well into old age when you no longer could afford it. Please think carefully. There's a reason that an inheritance is usually received after the death of a parent. Unless you are very wealthy, you have no idea how conditions, yours and your daughter's, may change in the future.

Nuttmeg · ‎03-09-2010

On 5/16/2014 WenGirl42 said:
On 5/16/2014 KathyPet said: We would be renting it to my daughter and son in law for the amount of the mortgage payment plus RE taxes and insurance all of which DH and I would pay. We would be selling the townhouse that DH and I own that they are currently living in and renting from us.. With my grandson growing rapidly they are in need of more space. The townhouse has appreciated quite nicely and would sell for substantially more than we paid. Houses are selling very well and quickly in the townhouse development so we would complete the purchase of a new home for them with cash, move them in, do necessary repairs on the town house (new carpet, paint etc.) ASAP and get it on the market. The real estate agent who sold us the townhouse said he would expect a contract within 30 days after listing it and settlement within 30-45 days after signed contract. To use a concrete example. Let's say the new house is $250,000. We pay cash and buy it. The townhouse sells and we net $75,000.00 after paying off the existing mortgage on the townhouse. We put the $75,000 back into the investment account and take the deed to the new house to the bank and apply for a mortgage,for $175,000 on the new house. take that money and put it back into the investment account. daughter and SIL can afford to cover the mortgage payment we would have to make plus taxes and insurance.

Why don't they just get the mortgage on the new property themselves?

Anyway, given this situation, I would just buy the house with cash and have them make the appropriate payments they would otherwise make to the bank to you. The house will be appreciating and you'll be getting monthly income from the property that you can put in other investments or do whatever else makes sense.

Your daughter and SIL are adults let them buy their own home. You and your DH are during enough. They must pay it all themselves. They will be much happier. If you want to do something nice start a 529 account for your grandchild's education.

Margo Channing · ‎03-09-2010

On 5/16/2014 Jabberjaw said:
On 5/16/2014 terrier3 said:
On 5/16/2014 pistolino said:
On 5/16/2014 KathyPet said: While my daughter has a good job and decent credit my SIL has intermittent work as a self employed contractor and lousy credit. My daughter's income alone would not qualify them for the mortgage and his income is sporadic and difficult to confirm. Yes, they do keep their finances separate so his ugly credit does not impact on her.

I guess it's just me, because I don't see any other person saying what I'm about to say, but if your daughter is old enough to have a child and an intermittently working husband, she should be figuring out her housing situation herself, using her own income and credit.

Basically, you are subsidizing a standard of living they really can't afford (if they can't qualify for the mortgage themselves) and her husband needs to figure out a more stable source of employment OR drum up some more business so his "intermittent work" isn't so intermittent.

You aren't going to be around forever. She needs to stand on her own 2 feet now, including qualifying for and getting a mortgage on a property on her own. One of the things a woman (or man) should be concerned with before they marry/have children with another person is their finances. She needs to live in the reality she made, not have you jump in and make it all better.

I also agree with you.

She is an adult. If she can't get a mortgage on her own, she and her family should rent...or stay where they are.

I second that! I know you love you daughter and grandchild. That goes without saying based on what you have already done for her and her family. However, give a hungry person a fish and they eat that day, give them a fishing pole and teach them how to fish, they never go hungry again. Life lesson.

I agree with this. She's an adult mature enough to have a child, they should be able to provide this child with stable home by themselves. You're just enabling an inflated lifestyle. The sooner they stand on their own two feet, the better.

A relative did something very similar for a family member, and all I am going to say it ended badly for both parties. Let' just say no good deed goes unpunished.