NWR: Homes-Updated

So my fsil came to FH and I to discuss us purchasing a home but with some strings attached.

She is willing to give us $40,000 + closing costs to purchase the home of our choice. She will be putting her name on the deed to help us with financing because I'm currently not working. My Mother and sister will be moving in with us to help out with the mortgage because I will be in graduate school for two years post wedding. (FH's, my Mother and sister's names will be on the deed.)

In return, once I get out of school and Fh and I want to get her off the deed....WE WILL PAY HER 1/3=33%, THE APPRAISED VALUE OF THE HOME.

Is this a good deal or no. My brother called me today ranting that she is trying to HUSTLE us,etc...I see exactly where he is coming from. He thinks that if she was doing us a favor, that she would just loan us to $40,000+ closing costs and let that be the only thing we have to pay back.

Initally I thought it was a great deal with the economy the way it is now...and the fact that we can get a home pretty cheap. But now I don't know. I did the math at for a home valued @ $300,000...we would have to pay her back $99,000 ( a profit on her part of around $49,000)

Would you ladies even consider such a deal?

That's a hard decision. You'll have to really sit down with your family and FH to discuss it. That's a lot of money to pay back ON TOP of you guys paying your mortgage. And what is she later doesn't want her name off the deed?

FYI - our closing cost were around 11K.

Personally, I wouldn't do it.

I wouldn't do it. I'd keep family and house purchasing as separate as possible. We took up a similiar offer (minus the repayment) and the family member ended up backing out and we were left empty handed with crushed hopes. Depending on where you're planning on living, you can take advantage of foreclosures etc and find something less than 300k. Maybe get a 'starter' and upgrade in a few years.

I don't know your relationship with your FSIL or what kind of person she is...but even people with the greatest intentions can put you in a tough spot. Sounds like sharing a lot of responsibility with a lot of people and that can get tricky. You don't want to get into a situation where either others living there aren't paying their share of the mortgage on time or not wanting to leave and find their own home/take their name off the house when you two are ready for it to be 'yours'.

Good luck.

I wouldnt do it, yes she's helpig you but SHE's the one that wins at the end with the 40k she loaned you PLUS and extra 49k.... she's making MORE than what she lent you !!!!!

MY MOTTO: DONT DO BUSINESS WITH FAMILY!!! ESPACIALLY IF IT INVOLVES MONEY!!!

---

Posted by jcaramelprincess

I wouldnt do it, yes she's helpig you but SHE's the one that wins at the end with the 40k she loaned you PLUS and extra 49k.... she's making MORE than what she lent you !!!!!

MY MOTTO: DONT DO BUSINESS WITH FAMILY!!! ESPACIALLY IF IT INVOLVES MONEY!!!

---

ITA!!! Don't do it!

---

Posted by StaceyWill

---

Posted by jcaramelprincess

I wouldnt do it, yes she's helpig you but SHE's the one that wins at the end with the 40k she loaned you PLUS and extra 49k.... she's making MORE than what she lent you !!!!!

MY MOTTO: DONT DO BUSINESS WITH FAMILY!!! ESPACIALLY IF IT INVOLVES MONEY!!!

---

ITA!!! Don't do it!

---

ITA....if u can afford to rent and keep your sanity do it. money and family never works out......IMO!

---

Posted by StaceyWill

---

Posted by jcaramelprincess

I wouldnt do it, yes she's helpig you but SHE's the one that wins at the end with the 40k she loaned you PLUS and extra 49k.... she's making MORE than what she lent you !!!!!

MY MOTTO: DONT DO BUSINESS WITH FAMILY!!! ESPACIALLY IF IT INVOLVES MONEY!!!

---

ITA!!! Don't do it!

---

I agree 1000%.

Helllllll no! If you have an argument you're screwedd!!!!! Its not easy to take someone off the deed and shes making a fortune off of you.

No no no!

We just sat down with fsil and voiced our concerns. She states that she is making an 'investment' with her 40k. She states that we will have a contract drawn up and we can buy her out whenever we want. If her 1/3 portion is let's say $100k we would pay her off by taking out a home equity loan.

She figures since I'll be out of school, FH and I would be able to pay off the home equity loan+mortgage. She leaves with her $100k and when FH and I are ready to sell the house, etc... we leave with whatever the house is appraised/sell for.

I'm thinking that if we did do this that we would take out the home equity loan as soon as I get out of graduate school and settled into a good job.That way the house is worth less $$$ and therefore, her 'profit' is less. Also I'm thinking that we would do NOTHING to the home as far as fixing it up because that would raise the value of the home and therefore the equity loan we would have to take out would be less.

---

Posted by jcaramelprincess

I wouldnt do it, yes she's helpig you but SHE's the one that wins at the end with the 40k she loaned you PLUS and extra 49k.... she's making MORE than what she lent you !!!!!

MY MOTTO: DONT DO BUSINESS WITH FAMILY!!! ESPACIALLY IF IT INVOLVES MONEY!!!

---

Totally agree. Now is not the time to buy a house if you can't afford it. You'll be doing yourself a disservice and be indebted to your FSIL.

DO NOT DO IT!!!! Besides the financial side of all this, the relationship WILL be changed forever, she will have power over you until you finish paying her off. And having your family in the house with the two of you as newly weds is just added stress that you don't need. Also, unless both of your names are on the deed, you cannot get a home equity loan, cannot refinance.. NOTHING, you will have absolutely no rights to the house. She will also likely be getting the tax deduction as HER name will have to be on the mortgage. This is absolutely not a good deal for you, very dangerous....

ONe of my good friends has been married to her husband for 2 years but her name was never added onto the deed. Now that he is out of work and she is making the $$$ with the record low interest rates, they CAN'T EVEN REFINANCE because her name hasn't been on the deed for 1 year!

I don't like the idea of someone, especially family, 'helping out'. She can always kick you out of the house, resell it to someone else, or tell you what you can or cannot do to the house, who can visit and when, etc, see where I'm going with this?
If she's looking for investment, maybe she can buy a house, and then do a 'rent to buy option' available to you and your FH.
Another option, which I'm still not comfy with, is that your FH and FSIL both are on the mortgage. But she is still 50% owner...
Although it is thoughtful on her side, I would not go through with it. But that is just my opinion.

Think really, really carefully about this.
I've learned that family and money can be a really dangerous combination and can lead to bitterness, resentment and bad feelings.
Only you know the family dynamics, but don't rush into anything. You wouldn't want to hurt your relationships over this.

Sorry, but this is a Judge Judy episode waiting to happen.

She is HUSTLING you for sure. Sorry to say that.

If you already have to plan out taking out home equity loans to pay her off with NO guarantee that you and FH will be able to pay it off (because this is all assuming you can get a 'good' job which at this point is not a smart assumption).

She thinks she's going to make $100k?! That's over 100% profit.

You're out of your mind if you go through with this.

---

Posted by Tetelove

We just sat down with fsil and voiced our concerns. She states that she is making an 'investment' with her 40k. She states that we will have a contract drawn up and we can buy her out whenever we want. If her 1/3 portion is let's say $100k we would pay her off by taking out a home equity loan.

She figures since I'll be out of school, FH and I would be able to pay off the home equity loan+mortgage. She leaves with her $100k and when FH and I are ready to sell the house, etc... we leave with whatever the house is appraised/sell for.

I'm thinking that if we did do this that we would take out the home equity loan as soon as I get out of graduate school and settled into a good job.That way the house is worth less $$$ and therefore, her 'profit' is less. Also I'm thinking that we would do NOTHING to the home as far as fixing it up because that would raise the value of the home and therefore the equity loan we would have to take out would be less.

---

It doesnt work that way. If you put nothing into the house you wont have any equity to borrow against. The odds of you getting a HEL are slim.

Now whose name will be on the mortgage? I dont think you can just put her on the deed and not the mortgage. You cant just buy her out. You'll have to remortage the house and it will be higher at that point.

Its a bad idea all around.

Better yet buy a smaller house out east for less money. You're prob better off waiting until you can buy it on your own. Trust me on this. Took me 7 years and 65k to deal w getting my ex off my house and i almost lost it.

---

Posted by Lucky2010

Sorry, but this is a Judge Judy episode waiting to happen.

She is HUSTLING you for sure. Sorry to say that.

If you already have to plan out taking out home equity loans to pay her off with NO guarantee that you and FH will be able to pay it off (because this is all assuming you can get a 'good' job which at this point is not a smart assumption).

She thinks she's going to make $100k?! That's over 100% profit.

You're out of your mind if you go through with this.

---

I'm sorry, I totally agree. This is really not the way to get your first house. Don't start off in debt to other people, especially not family. Anything can go wrong.

Ok so i asked my friend who is a real estate lawyer and his response was, 'is she on crack?'

Sorry but he really said that. :(