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Co Signing for Son on him getting a house

Co Signing for Son on him getting a house

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  #1  
Old 05-01-13, 07:31 PM
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Co Signing for Son on him getting a house

#1 Son a few years back got married for the first time.. They bought a house lived in it 2 years and got a divorce.. Son was left the house later that year he meets a girl and gets her preg... They get married and yes have a baby.
This girl does not and will not move in the house that he bought. It is in another part of town away from her Mom.
Son and her get a apt and puts house up for sale After about 2 years no buyers and he lets it go. Forclosed on it..

Son and her are both RN's well its been a year after and he now knows he has NO BUYING POWER.. He can't get a loan he makes good money but no way..
I had to cosign for his truck.

Son pays $1,400 a month rent now been a year..
Son tells me 2nd marraige is not doing to good. They have baby now...
A year later now things at home are better he tells me.
Son's woman record is not doing to good that does worry me.

I tell son to put you in a house i will cosign
on the house.. You can't pay rent raise a family rest of you life
My credit score is 790 we live in a 300K house with a 50K loan on it..

Tell me this if I cosign for the house they get a divorce.
For what ever reason..

What happens on the house with it also being under my name.
Can she get the house what happens if they get a divorce?
How long does forcloseure last on your record.
Thank you for reading this and your thoughts on it.
Tennessee
 
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  #2  
Old 05-02-13, 03:18 AM
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In all honesty....run. Son is not a minor. Wife is controlling. None of the story you told would lead me to cosign a loan for them. If they get a divorce, she could very well get a good attorney and you would be paying for her house for the rest of your life. Allow them to prosper or fall on their own accord. You have, apparently, done well with your life. Don't sink your ship on account of other family members' inability to prosper.
 
  #3  
Old 05-02-13, 04:20 AM
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Second Larry's comments. They could also default on the co-signed house and go into foreclosure (not a stretch , as there is a track record already); as a co-signer you would then be on the hook for the loan. Two RN's should have no need for anyone to co-sign for anything. I certainly wouldn't have co-signed on a car loan; he should have bought what he could afford even if it was a 20 year old Ford Escort. They simply have to learn to live within their means until such time as their credit improves. You're doing your son no favor in enabling him.

Foreclosures, like bankruptcy, I think are on your record for 7 years, but credit rating would slowly improve even during that 7 years as long as there were no other "events". Just a layman's opinions.
 
  #4  
Old 05-02-13, 05:36 AM
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No on the co-signing as stated. Another possibility would be for you to purchase a small home and rent it to them. That way you would be in control and the worst would be they stop paying rent. As long as you can comfortably make the payments and keep the house maintained, with or without rent, at least they will have a roof over their heads. Just keep it small and maybe they will pull their act together and move on to something they would rather live in. Make it too nice and they will live free forever.

Bud

PS, forgot to mention. If you co-sign and it goes to foreclosure, the bank doesn't care how long it takes to sell or at what price, they have you to make up ALL of the difference and interest plus ALL legal and foreclosure costs. Think 2 years of lawyer's fees plus an auction sale at half what it should have been worth.
 

Last edited by Bud9051; 05-02-13 at 05:43 AM. Reason: addition
  #5  
Old 05-02-13, 01:46 PM
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One more comment against co-signing a loan, for anything. Co-signing is the same as if you took out the loan yourself.

It is one thing to try to help your children, siblings or parents. It is a different thing entirely to destroy your own life in helping others.
 
  #6  
Old 05-02-13, 03:17 PM
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Another possibility would be for you to purchase a small home
Good point. Basically that is what you would be doing with cosigning a loan, only you wouldn't own it as you would with a purchase, and you wouldn't have rent money coming in.
 
  #7  
Old 05-02-13, 04:20 PM
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Co-signing is really a bad idea, especially with a relative who has the track record of your son. Don't rescue him; he is a big boy with a real job. If you keep rescuing him he will keep doing the STUPID things you have already mentioned. With co-signing you might as well go in assuming the worst, meaning you have to figure out how to to pay for the loan. At most, you should do what others said about buying a house and working out a lease-purchase deal but be ready to foreclose and kick him out if he defaults on his end of the bargain. Certified Financial Planner speaking here.
 
  #8  
Old 05-02-13, 08:26 PM
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Don't co-sign, as others have mentioned.

If you buy a home and rent it to them, it stays yours when they divorce and your son can inherit it some day to negate your argument about renting.
 
  #9  
Old 05-02-13, 09:13 PM
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I have offered to BUY him a house. He really has been a great kid never gave any trouble.
He is a RN wife is RN they just don't have buying power..
I just want Grandson to have a home nice place with other kids to be playing with instead of where they are at...

Im pretty comfortable about ready to retire been in this steel mill 31 years got nice 401K been putting in 15%. I know I don't want to waster it but I want best for Grandson....
AND hope he and her stay together.. A house might do the trick and it may not either

Thank you for all the GOOD advice
 
  #10  
Old 05-03-13, 03:05 AM
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You are a kind person. Buy the house, but if you give it as a gift, kiss it goodbye. Keep it in your name and let them build their credit some other way. Before you buy this house, set up a trust fund for the grandson. That way your initial intent is taken care of. Then you can help your son and his wife.
 
  #11  
Old 05-03-13, 04:33 AM
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Listen to Larry.
 
  #12  
Old 05-03-13, 04:44 AM
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I agree!! Grandkids tug at our heart strings but nobody benefits if you invest your money unwisely
 
  #13  
Old 05-03-13, 05:23 AM
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I agree with everything everybody else has posted!

If you can, buy the house and let them "rent" it from you. They make the payments which you will be helping them with the low rent. If things work out and they can afford to buy the house from you, then everybody wins. If not, then you are out nothing.
 
  #14  
Old 05-10-13, 12:01 PM
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No on the co-signing as stated. Another possibility would be for you to purchase a small home and rent it to them. That way you would be in control and the worst would be they stop paying rent. As long as you can comfortably make the payments and keep the house maintained, with or without rent, at least they will have a roof over their heads. Just keep it small and maybe they will pull their act together and move on to something they would rather live in. Make it too nice and they will live free forever.

Bud
I had this very same thought when I read the OP.
This would resolve the ownership issues if they split and could be an income property if they decide to move on to bigger and better.

I would highly recommend doing a rent to own arrangement. I did something similar with my parents on the house I grew up in when I first moved back to my home town.
How it worked (a bit different then normal rent to own) was;
- We agreed to a set monthly payment (no interest in my case) which calculated out to pay off the house in X number of years (my case 20).
- All money paid when to principle.
- The house remained in my parent's name until paid off (or a proper morgage was done later on in my case)
- All utilities, maintenance, etc was my responsibility. I paid the property taxes and insurance, as well.

The benefit of doing this is my parent's technically still owned the house and if I and the wife split, or what ever, they retained ownership. It was an interest free loan for me (huge savings) and allowed me to get my feet on the ground.
In the end, the wife and I took a normal morgage out and full out purchased the house. This was done because we wanted to use the equity to reinvest into it, and to give my parent's a large (thank you) lump sum of money. They owed nothing on the house, so it was a huge kick into their retirement funds.
All and all, a win, win.

If you are sure your boy is a good kid, this will help him and still provide both you and him a safety net.
 
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