A question about real estate, home purchases and m... - Page 5

shoekitty · ‎03-10-2010

We are in California. Not too long ago we sold my FIL's home. it was an as is, cash deal. Yes cash deal with real estate can "move mountains" as an agent related. The day the deed was signed , it was their's. And it is quick for a cash deal. We had to hold off them paying for the home 2 weeks, so we could get the home cleaned out. In California if you own a home outright, you can get a mortgage for 80% of the value. Value will be easy if little time has passed between purchase and loan. I was told you have to own the home for a year before you can get a loan though. There is a reason for that, but it takes too long to explain. The capital gains here are different for a second home than a first. You have to live in a home for over 2 years as primary residence to escape the higher capital gains

The only draw back to getting a mortgage on a second property, is the interest rate is higher.

Irshgrl31201 · ‎03-18-2010

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 agree with this.

I am all for helping your children but I don't see the need to do this when they can rent. There is nothing wrong with renting until he can work on his credit for a couple of years.

I would say go right ahead and buy it if you had the cash to do it without trying to get a mortgage to so you can get your money back. I don't know if this was your suggestion or theirs but that is a lot to ask when they can be perfectly fine by renting while working on repairing their credit.

I also think of the pride I have gotten from literally lifting myself out of hard times financially. Why would I want to take that same feeling of fulfillment, gratification and self worth away from my daughter?

Those who make peaceful revolution impossible will make violent revolution inevitable.
JFK

shoekitty · ‎03-10-2010

On 5/16/2014 Irshgrl31201 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 agree with this.

I am all for helping your children but I don't see the need to do this when they can rent. There is nothing wrong with renting until he can work on his credit for a couple of years.

I would say go right ahead and buy it if you had the cash to do it without trying to get a mortgage to so you can get your money back. I don't know if this was your suggestion or theirs but that is a lot to ask when they can be perfectly fine by renting while working on repairing their credit.

I also think of the pride I have gotten from literally lifting myself out of hard times financially. Why would I want to take that same feeling of fulfillment, gratification and self worth away from my daughter?

This is the truest statement ever, and very wise. There is a great lesson and sense of accomplishment that comes from working at these things. I have loaned my kids a few bucks to help with a down payment which was repaid quickly. But they did the major work themselves. I never co sign for anything either, I just don't.

shoekitty · ‎03-10-2010

Kathypet

One thing I wanted to mention is renting can be a good thing. IMO, it can be real good thing for someone who has sporatic work and credit issues. I have a friend who owned a home, her husband was a contractor in business for himself. One project turned disasterous, and he was good with steady income. In the end liens were attached to the home, and they lost it eventually.

I know being a contractor can have it's draw backs when applying for a mortgage. What you make, and what you "earn" are 2 different things! If you use the higher income to qualify, you may have explaining to do with IRS. If you go with the IRS reported earnings, you might not qualify. This is an issue for many people, especially here in California where the average home is at least 500,000.

I would rent if I was your daughter for a while, and make sure his credit and financial standing improve.

Owning a home can have it's positives when doing income taxes. But it isn't that much if you concider other things. One of the things that buying a home could effect (if you buy the home for them) is your relationship with your daughter.

KathyPet · ‎03-09-2010

Thank you all for your thoughtful responses. To respond to some of your concerns let me say that if it was just my daughter and son in law I would not even be considering this purchase and let me also say this is my idea and was not my daughter's. If the living situation was just my daughter and son in law they could continue to rent that townhouse from us forever however once my grandson was brought into the mix things changed as I am sure those of you with grandchildren will understand. The investment account we are taking the funds from is not a retirement account just a regular investment account so no tax issues with drawing from it. This is our only child and she will get it all when DH and I die so I guess I am thinking that I would rather see her have some of it now so,I can see her enjoy it. If this move does get made she will be moving from 45 minutes drive from us to the same town we are in. I will get to see my gorgeous grandson more often. Anyway lots and lots to think about but thanks to all of you for responding.

tansy · ‎01-02-2011

I admire posters who lay out their lives (bit of an exaggeration I know) and seem to value the various opinions. I hope your SIL is okay with moving closer and is able to find more steady work.

Mom2Dogs · ‎03-09-2010

OP, my husband and I are on the house hunt again.....and our plan is to also pay cash, we would sell ours, purchase the new one and use our savings to pay the difference, once the transaction is complete we were going to take out a home equity loan to pay back our loan.

shoekitty · ‎03-10-2010

Kathypet

I would do anything for my grandkids. Anything.

Lila Belle · ‎01-24-2013

I know many women who have better credit scores who have gotten mortgages based on their incomes alone. They didn't purchase homes that would have taken their husbands income into account but they got homes they could both afford. Not a bad thing and it is also empowering to the women, knowing that they have a positive influence and equality in their relationships.

Kalli · ‎03-11-2010

DH does real estate investing for a living and many times over the years he's scooped up a fine piece of property for actually less than other potential buyers were offering because he offered cash.

Having said that, please do your research about the area and real estate investments and current trends. It's better to invest in areas you're familiar with in order to increase your chance of success.

I also agree with what others have said. Be careful you are not setting your daughter up for failure by providing something for her that she can't afford herself which could lead to her always needing you to pad $ to replace shortfalls. It could cause a problem in her marriage, resentment and other negative consequences that you are in no way intending.

-Kalli