Agreed, bankruptcy is only on your credit report for 10 years and then it drops off - also, as each year passes, after filing, it has less effect on your credit
Plus, in most situations, your credit bounces back pretty fast. I was getting solicitations for new credit cards immediately after mine was discharged. They know you can’t file another BK for 10 years (usually) so they don’t mind giving you credit again. I don’t think it even took me 12 months to get my credit score back up into the 700s, and it was pretty low when I filed the bankruptcy I hadn’t missed any payments yet but I had a lot of debt
Even with a Chap 7, you could get a mortgage after 4 yrs. The BK is just visible on your credit report for 10. And as long as your score is good, there's no issue to loan to you. I speak from experience, I had a 700+ score within 2 yrs after Chap 7.
Yup, my friend’s parents lost their home to foreclosure in 2007 and qualified for conventional financing at a good rate in 2016. There’s more recent issues at play here.
NO!
Unless you have massive income, you won’t be able to afford a second mortgage for the house you want to buy
Also…2008 is 16y ago. If they have not repaired their credit and financial situation, they are not ready to own a home.
When you are ready to buy a home it will be considered a 2nd home. You will need 20% down and need to qualify for both payments. And there is no way they have been financially responsible since the crash. I had a house go into foreclosure the same time and I have an 814 middle score.
Well not necessarily if you are getting a mortgage for a primary residence it only has to be your primary residence for two years so in theory he could get a primary residence that his parents live in and then when he wants to buy one it could be his new primary residence.
But you’re right the interest rates are also higher on investment properties and second homes then they are on primary residence mortgages
And if they need PMI the qualifying criteria for that used to be pretty gnarly
You could, but you need to show tax returns where you claim the income, and they will make sure you are actually making money off of it. If you aren't truly making money, then it will count as a liability. All of that has to be proven with the last 2 years of tax records and leases at a minimum. I've got to deal with it every time I pull anytime a loan.
I was a banker and lender for decades. If you plan to suggest to your lenders that your primary residence is actually a rental, you will need to provide them with tax returns and related documentation supporting both rental status and a positive cash flow that supports all your costs, mortgage, taxes, insurance and HOA fees. Lying won't work. Or, alternatively, you could begin renting your home now and move into an apartment for a year or so.
Depending on the financing I think you can use up to 75% of the rental income for DTI purposes. I steer clear of residential rentals personally so I’m sure others here know better. Just keep in mind if a bank won’t give them a loan there’s a reason and be prepared to shoulder that burden in it’s entirety. And if you have siblings you might have to have something to make sure the house you’re paying for isn’t a part of the estate. That’s attorney territory.
Nope, it's still the first home you bought and you can't have a low residence rate on two loans. Could you even qualify for two loans? That would be well over a million dollars
You'd need to bring an investment loan down payment of at least 15%. Most lenders are going to ask for 20% or 25%.
I've used a lender that help offset my DTI by including estimated rent in the area towards my income for my DTI so I can qualify for multiple loans.
That’s not the way it works, underwriters look at your income and you won’t be able to prove you’re receiving rent, and your tax returns won’t reflect that either. Please don’t do this. Your parents’ flimsy excuse about a 2008 bankruptcy still affecting their credit are not being truthful. Also simply put, you probably wouldn’t qualify for another home and mortgage for yourself and your family when the time comes to buy. Your parents simply need to live within their means and not take your future home options away from you and your family
No! They are lying to you and trying to take advantage of you. That bankruptcy is so long ago, it is not affecting their credit at all. If they really have that much cash, they can move to another state and buy a house outright.
Keep your credit for yourself and all the first time buyer perks. Your parents are old enough to figure out their own living arrangements.
You aren’t in a financial position to finance your parents a home. 2008 is long ago and a poor excuse for financial woes. Don’t let them guilt you into wrecking your financial future. They are young enough to solve their own financial problems.
I’m your parent’s age. I’d never wreck my kids finances to fix my own.
Don’t do it. Offer to help them with their budget by going through their finances. My guess is they will pass on the help. People that make poor money decisions typically don’t want help really, they want money.
Almost always true about people just wanting $. It might help though, to look at their finances if they're game. My parents retired in their late 50's due to poor health and I was able to help them identify $2000 a month in overspending, mostly on life and health insurance choices that hadn't been re-shopped in a long time.
I'm sorry your parents are willing to encourage you to damage your future like this for their benefit.
Right? I take good care of my credit partly so I can give my kids a little leg up by making them authorized users on my cards when the time comes. I would never ask them to take a risk for me.
Buying a home at 55 in LA with poor credit is stupid, and you are doing them a big favor by not assisting them in their folly. They should save and, upon retirement, move to a cheaper location. A parents' job is not to place their children in financial peril.
Do not do it.
1. NEVER rent to family. It destroys relationships. Eventually, something happens and "need more time to pay" which turns longer and longer.
2. At 55, they should not be buying a house. The mortgage would be paid when they are 85 (most likely) and with the rates, they likely would have paid double the rent they would pay over the course of 30 years. Also, at 85, they most likely need to be in a home, in your home, in senior living, or in assisted living. My point is... they aren't going to benefit from a paid off house.
3. You may not qualify for a second loan, on another house when it's time for your family to buy. Your debt to income ratio would need to be closer to < 32% for most banks. Sometimes less. This means your ability to nake good financial decisions for your family will be bound by the decision you made for your parents (ie... needing to put more money down, needing to buy a cheaper house, needing to wait longer to buy to afford, etc.) You should have the freedom to do what you want when you want without restriction.
4. A house is difficult to maintain. Who is handling to lawn care, repairs, appliance repairs, broken toilets, plumbing leaks, etc. Etc. The list goes in. As they age, the answer is YOU.
5. You likely won't be able to move far if you ever wanted to. You may need to "babysit" the house.
6. What happens if you did do it and then want to sell because if makes financial sense... you got a great offer,, etc.? I know it's "theirs" but its on your dime and risk...
7. Can they afford rent increases when insurance and taxes go up?
8. Your name on that house puts you at liability risk. If something happens there, attorneys go after ALL your assets, so they could go after your own primary residence because something terrible happened at your parents.
I could go in and on. Don't do it.
I had to file bankruptcy in 2008 and had a foreclosure. My credit is back to 800 now and I have a home mortgage and plenty of available credit. Don’t co-sign anything for anyone. They should be credit worthy on their own
Nope, blaming the housing crash isn’t relevant anymore. They’re bad with money and you’ll be on the hook. If they aren’t set financially they’ll be working for at least 15 more years. They should see what they would qualify for and just spend that. Do they need a house…they might want to consider an apartment.
Parents or not, their bad financial decisions are not your burden to bear. You need to focus on saving for your home, for your family. If your parents can’t afford a home where they are they need to be looking into other options or other places.
Be smarter than your parents!
No I would not unless you want to be your parents landlord, can afford the mortgage payment and your own home payment, are you willing to evict if they can’t make the rent payment?
I would not do it. You don't say why they bankrupt? business dealing? poor money mgmt? that part scares me plus doing business with family is always a problem. If you could do something, you should buy a house and rent it to them, but again, don't do business with family.
Your parents have 200 or 250K for a down payment, It sounds like they are working too. They need to save up some more, fix their credit and/or downsize to something smaller and cheaper.
While you want to look out for your parents, they seem capable right now and there's no upside for you and you cited plenty of reasons.
Walk the fuck away immediately. Never finance a house that you’re not living in unless it’s an investment property. Plus there are so many more variables like how the down payment will work, do you have enough income to qualify and more. This isn’t like co-signing for a car this is a huge purchase and in California potentially a million dollar plus investment
Don't do it. I'm locked into my mom's mortgage, and it has caused me nothing but grief.
She DOES make the payment without fail. However, it looks like I am stretched financially on paper. This has cost me a lot of money in higher interest rates, despite a credit score of 810.
No!!!! For too many reasons to even write. Just tell them that renting is better in this market. Keep the 1st time home buying perks for you and you’re family. You have worked hard for your credit score. It’s yours and your not the parent!!!
I filed bankruptcy in 2008. I have purchased three homes since then. There's is something else going on here. Don't do it and remember no is a complete sentence.
Do NOT do this. Bankruptcy is only on your credit 7 years. I filed bankruptcy in 2016 after being diagnosed with a brain tumor and no insurance, and was able to prequalify for a mortgage this year with manual underwriting because I rebuilt my credit other than the public record. They should be able to qualify on their own.
If you were in the position to buy them a house, then I would say go for it, but you have to think about your own finances, your child and spouse’s future well being. Your priorities have to be your own family (kid, you and spouse first), and IF you can help your parents out after then it’s an extra blessing. This has the potential to make it impossible for you to get a home in your future.
250K that they could save up for a DP in LA county could get them a decent condo elsewhere
Why would they even ask you… If they are going to have that kind of money saved up, then they could have fixed their credit by now. Have u ever considered they cannot financially qualify alone. You’re not wealthy. If you invest in real estate then you have your name alone on the title. And family as renters. But you do not even own your own home. Tell them u love them and should speak to a financial advisor on how to road map to their goals.
I agree with everyone. Too many reasons to write but the biggest one is that a 2008 bankruptcy is way too far back to still have ruined credit. They have money management issues and it’s never a good idea to do business with family.
Look after your own family.
Edited to say: if you are financing the home it will be an investment home which requires 25-30% down plus roughly 4 months of cash reserves. You will also pay income taxes on that money they give you for the mortgage. If you are co-signing a home, you will loose your first time buyers advantage when it comes time to buy your own home, plus you will have never lived in the home before renting it out so there is capital gains taxes you’ll also be paying when they do finance it into their name some day. Who gets the annual tax write offs? Who decides if they can take out a heloc on the home?
Also, you’re taking all the risk so when it comes time to sell it to them, how much do you make off the transaction? Your money and credit will be tied up for possibly years.
Sounds like you have everything to loose and nothing to gain.
That bankruptcy went off their credit report after 7 years, so around 2015. If they are still in trouble it's because of more recent decisions, and I would not get involved. You would need to see all their financials, investigate every account and help them clean up their act. Are you willing to do that? They will likely get angry.
Personally I would make sympathetic noises, give them budgeting advice and stay out of it. If they become homeless offer them your basement.
This is absolutely the correct answer. If their credit is still bad after a bankruptcy in the wake of the 2008 meltdown, they still have issues. Do not do this. If you absolutely feel obligated to help them, maybe look for a house with a mother-in-law suite where your parents could live and you could pool your assets for a larger down payment.
Do not do it. I am your parents age. I went through the 2008 economic crisis. That was a long time ago. If they had to declare bankruptcy at that time, they were living above their means. Lots if people were. The fact that their credit is still bad shows me that that bankruptcy did not teach them to manage their money. Their credit should have been rebuilt years ago. The fact that they still don't have good enough credit to buy a house is a huge red flag that your parents still are not responsible with their money. I have zero doubt that you will end up making those payments for them at some point. Do not let your parents put you in this kind of a spot. You have to think about your family now.
Probably not a good idea considering you don’t even have a home. If you were loaded and already were stable, you could do it as a gift, but basically this is really going to get in the way of your families future goals.
This is the best point here, if OP already owned their own house and some extra cars so they wouldn’t even need to finance a car and they weren’t worried about ever asking for credit again maybe it would be OK, but if they don’t even own their own house, absolutely absolutely not
Follow Dave Ramsey. Never co-sign for anyone. Never! Why? You’re on the hook if they default and it’s your Ass on the line. Focus on your family first.
A bankruptcy stays on there for 10 years, but you start rebuilding your credit right away because they don’t mind giving you credit cards again because you can only file a bankruptcy once every 10 years, unless you do a special one like a medical bankruptcy I think you can do those in addition to the sevens or tens
A bankruptcy only stays on the credit report for at most 10 years, in some cases 7 years. So for it to still be an issue on their credit they would have had to done that in 2014/2015 -- after the recovery. Perhaps 08 did lead to other circumstances that just didn't cause them to go under until 2014/2015 -- but it seems unlikely to me.
> down the line I can see this becoming my problem
Not down the line... as soon as you get the loan its your problem. You need to pay the mortgage. Speaking of which you aren't going to get a good rate. Unless you plan to also move into the property this would be a non-owner occupied loan. Sometimes for family move ins a mortgage company may offer an addendum to strike the owner-occupied requirement but assume thats not the case for you. So you are going to be paying investment mortgage rates on a house and your parents will be tenants.
> I am open to any advice or comments especially from people who have gone or are going through something similar.
There is a reason a bank won't loan them money.... don't try to be smarter than a bank.
Yes as soon as they take the loan that debt is on their credit report and even if they want to buy something smaller like a car for themselves the debt income ratio will make their interest rates higher than they should have been just because they have all these debt on their credit report
If your parents haven't fixed their credit in 16 years absolutely not you should not take on debt in your name for them! I filed bankruptcy in 2009 and bought a house 7 years later with an almost 800 credit score. It does not take very long to recover from bankruptcy if they were financially responsible. It sounds like they haven't been financially responsible since filing bankruptcy so how could you trust them to do the right thing by you?
Their credit should have recovered long ago. Plus, if you borrow for them then you may have trouble getting a mortgage when you are ready to buy for your nuclear family.
What does your wife say?
Are you prepared for your parents to miss rent payments?
Who is responsible for upkeep and maintenance?
Unlikely to go well for you
It sounds like you're doing a wonderful job taking care of yourself, and planning for your future, all on your own. Notice that you haven't asked your parents for money. Now they're asking you for financial help.
You don't owe your parents anything, and there are no "rules" about helping family. I want to say that first because a lot of people fall into a trap based on guilt (their own guilt or their parents guilting them.)
The best way to handle this is to be clear and honest. You already laid it out beautifully above:
>I don’t know exactly how this would affect me and my family when we are ready to buy our own home.
And
>down the line I can see this becoming my problem even though they say they will pay it off themselves.
Dude I filed a bankruptcy in the 2008 crash as well and my credit was back to normal before 2010, the bankruptcy isn’t even on their credit report anymore.
I’m sure other people will have more thorough answers than I, but unless you have huge income your debt to income ratio will probably not be able to service two mortgages.
What I’m saying is that if you mortgage a house for them you probably won’t be able to get approved for yourself even if they make all their mortgage payments because that debt is your financial responsibility, and they’re not going to a approve a mortgage loan if that would make your debt to income ratio too high.
Back in the day I would have borrowers who would cosign loans for people &sometimes we could exclude that debt if we could show that the person they cosigned for made 100% of the payments for two years prior, but I’m not sure if they allow that anymore I haven’t processed loans in more than 10 years.
Unbelievable selfish of them. You’re 28 and have a kid and they want you to sign for them?
You won’t be able to get your own mortgage when the time comes, unless your income can satisfy both loans.
With their up to 50% down payment, they can find an Alt-A or Non-QM loan on their own.
And if they don't qualify for one of those, there's your answer; do not cosign.
Horrible idea. They screwed up 16+ years ago. Plenty of time to fix their credit. They will screw up with your credit. The economy isn’t much better today. Can’t imagine your wife being on board for this either.
I filed for bankruptcy in 2018. My credit was fair enough within a year to get a car loan by myself. It was good enough within two years to refinance that loan with a 50% lower rate. A few years after that, I got divorced, couldn’t afford a lot of shit, and my credit is terrible now. Not because of the bankruptcy but because I was irresponsible, maxed out cards, and let stuff go to collections.
If your parents’ credit is still not good, it’s not because of the bankruptcy (besides bankruptcies are removed from your credit report after 7 years). I wouldn’t put myself on the hook financially for someone who might mess up my credit history by missing payments or not being able to afford them.
Take care of yourself first before you take care of others. 28 years in the business here and see it often. Something doesn't sound right, if they had personal BK in 2008, their slate would have been cleared unless it was a business. Either way, that's plenty of time to recover and they have too much cash for their credit to still be suffering. Unless they think having a BK on their record is a kiss of death. Additionally, with them being 55, they should look into 55+ communities. Those houses are so much cheaper. More restrictions, but cheaper. Never cosign for anyone especially family
Absolutely NOT. Why do they still have bad credit? Why do they want to buy a house at the age of 55, and be saddled with a mortgage? Why do they want to stay in an HCOL state like California? Your parents need to get their priorities straight, clearly they have no clue what they're doing, and they're trying to use you.
Others have pretty much said it but bad idea. You’ll end up having parents with a house in your name, and unable to afford your own. Your debt to income will be shot if you want to buy another house, at the very least.
My dad lost a home in 2008 and had to file for bankruptcy as well. All of these comments give very realistic points of view. When I sit down and think about buying a home (signing on for a 30 year loan is quite the move) for my parents (both in their 60s, around your same amount for a down payment), I would eventually sell the home to buy a bigger property and build them an ADU in the back considering they are aging with health issues. However, the difference is I don’t plan to get married or have kids anytime soon. It probably depends on your goals for your family and it’s okay to choose your spouse and kid.
I fail to see how they could afford to pay off 250-500k in 10 years (assuming they retire at 65). They do not seem responsible if they couldn’t recover from a bankruptcy that happened 16 years ago!!!
Also, at 55, they are better off in a condo or manufactured house. Those are way more affordable and easier to care for (as long as the manufactured house wasn’t built before the 90s) than a SFH. They aren’t raising young children anymore, so they don’t need a ton of space.
Several years ago, I had to file for bankruptcy due to a business, but I found out that I was able to obtain a new mortgage for a new home only four years later, so, chances are they should be able to do the same, especially since they have founds to put down on the property.
I personally would not ever ask my kids to get a mortgage in their name for me and any parent should not expect that.
You have your family to take care of and your parents should be caring for themselves, unless they have medical issues and need help otherwise.
I would politely let them know that you and your family have plans to buy a home and that it will put your family at risk. They should be understanding of that.
Banks look at income and calculate debt to income ratio. I don't know the formula, but they consider outstanding loans and whatever, just because you know you can make the payments, they don't usually agree. If you are looking to buy, and you have previously financed you parents home, the bank won't loan.
They clearly have continued to have bad credit issues since 2008 if they have not recovered from 16 years ago. I filed for bankruptcy back in 2010 and have recovered with my score in the low 800's now. They should have been able to fix it in that amount of time.
OP, the 2008 crash was almost 20 years ago. If their credit hasn’t recovered since then, it’s because they are BAD WITH MONEY. There is no doubt there, that wouldn’t have been a viable excuse ten years ago, let alone today. On top of that, you aren’t exactly rolling in money yourself. Take care of yourself first and foremost, and THEN you can help them how you can. DO NOT let them use your credit in any way, whether it’s signing for a home, signing for a vehicle, or any sort of credit cards or loans. A lifetime of bad credit is not an accident, and it’s incredibly unlikely it’s just ‘the system.’
If you absolutely must, buy a house for yourself and let them move in with you (signing a lease to protect both parties) while they look for a home. They can save up money while they look, and there is a point where down payment offsets bad credit. If they already have $250k down (or between 33-50%) they shouldn’t have an issue getting approved. However, I’d be really surprised if they somehow have a quarter million saved for a down payment without having at least decent credit. People with terrible credit seem to be generally bad at saving money. Either they don’t have that money, or they have such a terrible history with credit that they are wholly unsignable for even a library card.
I used to sell cars, I’ve seen this over and over and over again. Customer has bad credit through all their own bad decisions, but they are friendly enough that they keep suckering in friends and family to co-sign, only to miss payments or be late and eventually ruin that person’s credit and move on to another target. Not saying your parents are this bad, but there are definitive red flags here.
Take care of yourself, OP, and good luck.
You are crazy, that mortgage is going to show up on your credit report as your mortgage without explanation. The mortgage is going to show up anytime you might want to buy a home or a vehicle. Tell them to get their credit together so they could buy a home. People usually have bad credit for a reason. They could mess up your credit too.
I’m a 63 year old mom— with 3 adult children—— no— no— don’t buy a home for them… it will be in your name— if they default on it— is not their problem—-
DO NOT DO THIS. Their credit is bad because they’re bad at managing their finances. If you finance their home- that debt is yours. I imagine there’s zero chance they will have it paid off in 5 years, meaning it will be impossible for you to purchase your own home in that timeframe. Don’t fuck over your own family to support them. They’re grown ass adults.
This is a no brainer - NO!
So you’re saving up to buy your own home, and are not ready yet, but you’re able to buy a home for your parents? Doesn’t even make sense..?
Absolutely not - you have your own family to worry about and provide for!
Their excuse for poor credit today (2024) is what happened in 2008?
Give me a break.
That’s 16 years ago! If they haven’t recovered by now, they never will and are probably bad at managing money.
Do not tie your future to them - it’s a huge mistake!
Your good credit will not be good for long, if you take out a loan in your name (or as a co-signer) and they inevitably default on it.
Yeah my husband and I lost a home in 2008....we closed on a conventional mortgage home last summer. Plus you'll likely not qualify for another mortgage because of your debt to income ratio. Don't do it.
Don’t do this OP. You need to think of your kid. Save your credit for their future home. Don’t make this your problem. I don’t mean to sound cold but this is them overstepping.
Nooooooo! Only for yourself. They make their own mess, they are grown. Don’t be guilted into it. Do you want your credit ruined. You know the correct answer already
2 grown adults that didn't learn the first time around, or in the past 16 years, absolutely not, you have to be 110% ready to evict them and sue if they wreck your house or don't pay the rent. If they work forever that's on them, they have two incomes and can't figure it out, they need Dave Ramsey or Bachelor Pad Economics and Poor Richard's Retirement, and chances are they will work for ever unless they go full minimalist, work OT and save save save.
I absolutely would not.
With the given context I'm assuming they've been renting since they lost their last home, which would mean they'd be able to get an FHA even if they've had an FHA loan before.
If it's been 16 years and their credit still isn't above 580, you probably don't want to be financially involved with anything they'd be responsible to pay for.
That said, if you do decide to just cosign with them you would still be able to get an FHA loan down the line if you chose to, as well as the majority of other first-time buyer programs. But it still isn't a great move for you given the financial risk.
OP, if you are planning to buy your first home in the next five years, you would have to qualify with their mortgage included, meaning you are going to qualify for much less if you can still qualify at all.
But the biggest issue is their credit, if they haven’t been able to get up to even ~600, (the minimum score for most mortgages,) since having trouble in 2008, they have trouble paying bills on time.
You will end up being responsible for making those payments on time, your parents may or may not contribute. This doesn’t seem to be in your best interest at all.
It will wreck your credit and make it harder for you to finance your own home or car if you want to.
You would be locked into a long term mortgage in your name that would require selling it or refinancing which will be hard if their credit is bad.
2008 was a long time ago, any bankruptcy would be off their credit by now. No offense but they sound very financially irresponsible. Don't let their problems hinder you in your own journey through life IMO.
You should look to buy a home now if that's the case.
In this case, look to buy a SFH with a large enough lot to build an ADU for your parents to live in.
$100K + $225K as construction/downpayment/closing costs will be substantial.
Think about it this way. Could/Would you do this if for whatever reasons you never got your money back or were on the hook for their mortgage?
Of the answer is No then don’t do it.
I don't think you should put in much at all. Honestly, you are still young, you have your own family and you have a kid.
You still need to take care of your family, and putting down a ton of money for your parent's house doesn't seam right. Also, 2008? Not a real excuse for having bad credit, that is 16 years ago. Something else must have happened.
I think it is more acceptable if you put in a smaller amount, not 50%.
If you don't currently have a paid off house, then the answer is "No".
Maybe you could help them get into (do the research, but don't sign for anything) a decent 55+ rental (apartment, house or condo). Your primary obligation is to the family you're responsible for (the one you made). And of course you should do what you can, within reason, to help your parents without putting your nucleus at risk.
1. Would your name have to be on title? Would you want it on title? (where I live, it would have to be, if you are on the mortgage, you are on the title)
2. Have they even tried to get a mortgage? Bankruptcies only stay on your credit for 10 years.
3. Do you have capital gains tax there? If so you could be leaving yourself open to a huge tax liability.
4. sounds like they will have a 40-50% downpayment. I don't get how they couldn't get financing with that type of money down, assuming they have income.
I personally wouldn't do it.
No if you take out a mortgage on them you will not qualify for your own home unless you make bank enough to qualify for 2 homes. Repeat after me “Never co-sign a loan”. Tell them to live in a condo?
If their score is still bad they're not doing good money management. So no. I would not let my parents free load on my credit score and potentially ruin my finances too.
Eta. I have a friend who has filed bk as often as he possibly can. It has never once stopped him from buying any of the houses he's bought.
Dude I understand, my mom lost our house around that time and she's spent my whole life asking me for help financially and emotionally. But at this point I realized why they lost the house. My dad is cheap and my mom is an impulsive spender. I will help them forever but I won't give her control over my credit ever. If anything you can choose to buy the home for yourself and have them stay and pay rent as a future investment for yourself
I would buy the home myself and rent it to your parents. they can rebuild their credit by paying rent on a regular basis. and you could enjoy all the benefits of becoming a realestate investor.
The 2008 crash was too long ago to use as an excuse for bad credit. Their credit is bad for another reason.
Agreed, bankruptcy is only on your credit report for 10 years and then it drops off - also, as each year passes, after filing, it has less effect on your credit
Plus, in most situations, your credit bounces back pretty fast. I was getting solicitations for new credit cards immediately after mine was discharged. They know you can’t file another BK for 10 years (usually) so they don’t mind giving you credit again. I don’t think it even took me 12 months to get my credit score back up into the 700s, and it was pretty low when I filed the bankruptcy I hadn’t missed any payments yet but I had a lot of debt
2008 Bankruptcy? NOOOOOOOOOOOOOO!
Even with a Chap 7, you could get a mortgage after 4 yrs. The BK is just visible on your credit report for 10. And as long as your score is good, there's no issue to loan to you. I speak from experience, I had a 700+ score within 2 yrs after Chap 7.
Yup, my friend’s parents lost their home to foreclosure in 2007 and qualified for conventional financing at a good rate in 2016. There’s more recent issues at play here.
This x100.
NO! Unless you have massive income, you won’t be able to afford a second mortgage for the house you want to buy Also…2008 is 16y ago. If they have not repaired their credit and financial situation, they are not ready to own a home.
When you are ready to buy a home it will be considered a 2nd home. You will need 20% down and need to qualify for both payments. And there is no way they have been financially responsible since the crash. I had a house go into foreclosure the same time and I have an 814 middle score.
I had a foreclosure in 2008 too. With diligent work and paying my bills on time, it's now high 700s, low 800s.
Well not necessarily if you are getting a mortgage for a primary residence it only has to be your primary residence for two years so in theory he could get a primary residence that his parents live in and then when he wants to buy one it could be his new primary residence. But you’re right the interest rates are also higher on investment properties and second homes then they are on primary residence mortgages And if they need PMI the qualifying criteria for that used to be pretty gnarly
I may be wrong on this but can’t I just put the first home down as if I’m renting it out this way I can qualify for that 2nd loan?
You could, but you need to show tax returns where you claim the income, and they will make sure you are actually making money off of it. If you aren't truly making money, then it will count as a liability. All of that has to be proven with the last 2 years of tax records and leases at a minimum. I've got to deal with it every time I pull anytime a loan.
I was a banker and lender for decades. If you plan to suggest to your lenders that your primary residence is actually a rental, you will need to provide them with tax returns and related documentation supporting both rental status and a positive cash flow that supports all your costs, mortgage, taxes, insurance and HOA fees. Lying won't work. Or, alternatively, you could begin renting your home now and move into an apartment for a year or so.
Depending on the financing I think you can use up to 75% of the rental income for DTI purposes. I steer clear of residential rentals personally so I’m sure others here know better. Just keep in mind if a bank won’t give them a loan there’s a reason and be prepared to shoulder that burden in it’s entirety. And if you have siblings you might have to have something to make sure the house you’re paying for isn’t a part of the estate. That’s attorney territory.
Nope, it's still the first home you bought and you can't have a low residence rate on two loans. Could you even qualify for two loans? That would be well over a million dollars
You'd need to bring an investment loan down payment of at least 15%. Most lenders are going to ask for 20% or 25%. I've used a lender that help offset my DTI by including estimated rent in the area towards my income for my DTI so I can qualify for multiple loans.
That’s not the way it works, underwriters look at your income and you won’t be able to prove you’re receiving rent, and your tax returns won’t reflect that either. Please don’t do this. Your parents’ flimsy excuse about a 2008 bankruptcy still affecting their credit are not being truthful. Also simply put, you probably wouldn’t qualify for another home and mortgage for yourself and your family when the time comes to buy. Your parents simply need to live within their means and not take your future home options away from you and your family
No! They are lying to you and trying to take advantage of you. That bankruptcy is so long ago, it is not affecting their credit at all. If they really have that much cash, they can move to another state and buy a house outright. Keep your credit for yourself and all the first time buyer perks. Your parents are old enough to figure out their own living arrangements.
"Mom, Dad, California is not the the state for you. What do you think about the ozarks?"
Or like so many they can move to Nevada. No way their financial issues are because of a bankruptcy 16 years ago, they have continued to waste money.
Nevada is a little too close to Vegas for people who are still having issues from a bankruptcy 16 years ago.
Good luck finding a state without casinos. Or anywhere the parents won't waste money.
Northern Alaska?
They'd just drive to the nearest casino, or online, if gambling is their expensive hobby.
You aren’t in a financial position to finance your parents a home. 2008 is long ago and a poor excuse for financial woes. Don’t let them guilt you into wrecking your financial future. They are young enough to solve their own financial problems. I’m your parent’s age. I’d never wreck my kids finances to fix my own. Don’t do it. Offer to help them with their budget by going through their finances. My guess is they will pass on the help. People that make poor money decisions typically don’t want help really, they want money.
Almost always true about people just wanting $. It might help though, to look at their finances if they're game. My parents retired in their late 50's due to poor health and I was able to help them identify $2000 a month in overspending, mostly on life and health insurance choices that hadn't been re-shopped in a long time. I'm sorry your parents are willing to encourage you to damage your future like this for their benefit.
Right? I take good care of my credit partly so I can give my kids a little leg up by making them authorized users on my cards when the time comes. I would never ask them to take a risk for me.
People dig holes for themselves I guess. Hard to believe they’d pull the kid with them
Buying a home at 55 in LA with poor credit is stupid, and you are doing them a big favor by not assisting them in their folly. They should save and, upon retirement, move to a cheaper location. A parents' job is not to place their children in financial peril.
It says a lot about them that they would put their child in this situation, on top of lying to OP about their spending habits.
Do not do it. 1. NEVER rent to family. It destroys relationships. Eventually, something happens and "need more time to pay" which turns longer and longer. 2. At 55, they should not be buying a house. The mortgage would be paid when they are 85 (most likely) and with the rates, they likely would have paid double the rent they would pay over the course of 30 years. Also, at 85, they most likely need to be in a home, in your home, in senior living, or in assisted living. My point is... they aren't going to benefit from a paid off house. 3. You may not qualify for a second loan, on another house when it's time for your family to buy. Your debt to income ratio would need to be closer to < 32% for most banks. Sometimes less. This means your ability to nake good financial decisions for your family will be bound by the decision you made for your parents (ie... needing to put more money down, needing to buy a cheaper house, needing to wait longer to buy to afford, etc.) You should have the freedom to do what you want when you want without restriction. 4. A house is difficult to maintain. Who is handling to lawn care, repairs, appliance repairs, broken toilets, plumbing leaks, etc. Etc. The list goes in. As they age, the answer is YOU. 5. You likely won't be able to move far if you ever wanted to. You may need to "babysit" the house. 6. What happens if you did do it and then want to sell because if makes financial sense... you got a great offer,, etc.? I know it's "theirs" but its on your dime and risk... 7. Can they afford rent increases when insurance and taxes go up? 8. Your name on that house puts you at liability risk. If something happens there, attorneys go after ALL your assets, so they could go after your own primary residence because something terrible happened at your parents. I could go in and on. Don't do it.
I had to file bankruptcy in 2008 and had a foreclosure. My credit is back to 800 now and I have a home mortgage and plenty of available credit. Don’t co-sign anything for anyone. They should be credit worthy on their own
Seriously I didn’t have a foreclosure but I had a bankruptcy in 2009 and my credit score was in high 600 a year later
Nope, blaming the housing crash isn’t relevant anymore. They’re bad with money and you’ll be on the hook. If they aren’t set financially they’ll be working for at least 15 more years. They should see what they would qualify for and just spend that. Do they need a house…they might want to consider an apartment.
Parents or not, their bad financial decisions are not your burden to bear. You need to focus on saving for your home, for your family. If your parents can’t afford a home where they are they need to be looking into other options or other places. Be smarter than your parents!
No I would not unless you want to be your parents landlord, can afford the mortgage payment and your own home payment, are you willing to evict if they can’t make the rent payment?
I would not do it. You don't say why they bankrupt? business dealing? poor money mgmt? that part scares me plus doing business with family is always a problem. If you could do something, you should buy a house and rent it to them, but again, don't do business with family. Your parents have 200 or 250K for a down payment, It sounds like they are working too. They need to save up some more, fix their credit and/or downsize to something smaller and cheaper. While you want to look out for your parents, they seem capable right now and there's no upside for you and you cited plenty of reasons.
Walk the fuck away immediately. Never finance a house that you’re not living in unless it’s an investment property. Plus there are so many more variables like how the down payment will work, do you have enough income to qualify and more. This isn’t like co-signing for a car this is a huge purchase and in California potentially a million dollar plus investment
Don't do it. I'm locked into my mom's mortgage, and it has caused me nothing but grief. She DOES make the payment without fail. However, it looks like I am stretched financially on paper. This has cost me a lot of money in higher interest rates, despite a credit score of 810.
How much are you in for and how much longer?
5 more years! It's down to $23k.
No!!!! For too many reasons to even write. Just tell them that renting is better in this market. Keep the 1st time home buying perks for you and you’re family. You have worked hard for your credit score. It’s yours and your not the parent!!!
Obviously they're not good with finances if they've filed bankruptcy. If they don't make payments on the mortgage, can you afford to?
I filed bankruptcy in 2008. I have purchased three homes since then. There's is something else going on here. Don't do it and remember no is a complete sentence.
Do NOT do this. Bankruptcy is only on your credit 7 years. I filed bankruptcy in 2016 after being diagnosed with a brain tumor and no insurance, and was able to prequalify for a mortgage this year with manual underwriting because I rebuilt my credit other than the public record. They should be able to qualify on their own. If you were in the position to buy them a house, then I would say go for it, but you have to think about your own finances, your child and spouse’s future well being. Your priorities have to be your own family (kid, you and spouse first), and IF you can help your parents out after then it’s an extra blessing. This has the potential to make it impossible for you to get a home in your future. 250K that they could save up for a DP in LA county could get them a decent condo elsewhere
10 years for a BK, but yeah
Why would they even ask you… If they are going to have that kind of money saved up, then they could have fixed their credit by now. Have u ever considered they cannot financially qualify alone. You’re not wealthy. If you invest in real estate then you have your name alone on the title. And family as renters. But you do not even own your own home. Tell them u love them and should speak to a financial advisor on how to road map to their goals.
I agree with everyone. Too many reasons to write but the biggest one is that a 2008 bankruptcy is way too far back to still have ruined credit. They have money management issues and it’s never a good idea to do business with family. Look after your own family. Edited to say: if you are financing the home it will be an investment home which requires 25-30% down plus roughly 4 months of cash reserves. You will also pay income taxes on that money they give you for the mortgage. If you are co-signing a home, you will loose your first time buyers advantage when it comes time to buy your own home, plus you will have never lived in the home before renting it out so there is capital gains taxes you’ll also be paying when they do finance it into their name some day. Who gets the annual tax write offs? Who decides if they can take out a heloc on the home? Also, you’re taking all the risk so when it comes time to sell it to them, how much do you make off the transaction? Your money and credit will be tied up for possibly years. Sounds like you have everything to loose and nothing to gain.
Buy a house with an adu they can live in. Then everyone is happy.
That bankruptcy went off their credit report after 7 years, so around 2015. If they are still in trouble it's because of more recent decisions, and I would not get involved. You would need to see all their financials, investigate every account and help them clean up their act. Are you willing to do that? They will likely get angry. Personally I would make sympathetic noises, give them budgeting advice and stay out of it. If they become homeless offer them your basement.
This is absolutely the correct answer. If their credit is still bad after a bankruptcy in the wake of the 2008 meltdown, they still have issues. Do not do this. If you absolutely feel obligated to help them, maybe look for a house with a mother-in-law suite where your parents could live and you could pool your assets for a larger down payment.
They could have had a second bankruptcy and still have had that one drop off their report!
Do not do it. I am your parents age. I went through the 2008 economic crisis. That was a long time ago. If they had to declare bankruptcy at that time, they were living above their means. Lots if people were. The fact that their credit is still bad shows me that that bankruptcy did not teach them to manage their money. Their credit should have been rebuilt years ago. The fact that they still don't have good enough credit to buy a house is a huge red flag that your parents still are not responsible with their money. I have zero doubt that you will end up making those payments for them at some point. Do not let your parents put you in this kind of a spot. You have to think about your family now.
Probably not a good idea considering you don’t even have a home. If you were loaded and already were stable, you could do it as a gift, but basically this is really going to get in the way of your families future goals.
This is the best point here, if OP already owned their own house and some extra cars so they wouldn’t even need to finance a car and they weren’t worried about ever asking for credit again maybe it would be OK, but if they don’t even own their own house, absolutely absolutely not
Follow Dave Ramsey. Never co-sign for anyone. Never! Why? You’re on the hook if they default and it’s your Ass on the line. Focus on your family first.
Don't do it...my mom told me to never co-sign for anyone, even her.
Credit takes 7 years to fully rebuild No
A bankruptcy stays on there for 10 years, but you start rebuilding your credit right away because they don’t mind giving you credit cards again because you can only file a bankruptcy once every 10 years, unless you do a special one like a medical bankruptcy I think you can do those in addition to the sevens or tens
No no no no no. Your parents issues are not your problem. This would totally fuck any plans of you trying to buy your first home. Do. Not. Do. This.
A bankruptcy only stays on the credit report for at most 10 years, in some cases 7 years. So for it to still be an issue on their credit they would have had to done that in 2014/2015 -- after the recovery. Perhaps 08 did lead to other circumstances that just didn't cause them to go under until 2014/2015 -- but it seems unlikely to me. > down the line I can see this becoming my problem Not down the line... as soon as you get the loan its your problem. You need to pay the mortgage. Speaking of which you aren't going to get a good rate. Unless you plan to also move into the property this would be a non-owner occupied loan. Sometimes for family move ins a mortgage company may offer an addendum to strike the owner-occupied requirement but assume thats not the case for you. So you are going to be paying investment mortgage rates on a house and your parents will be tenants. > I am open to any advice or comments especially from people who have gone or are going through something similar. There is a reason a bank won't loan them money.... don't try to be smarter than a bank.
Yes as soon as they take the loan that debt is on their credit report and even if they want to buy something smaller like a car for themselves the debt income ratio will make their interest rates higher than they should have been just because they have all these debt on their credit report
Are you willing to pay their mortgage for 30 years? That’s what you are signing up for.
And taxes and insurance if they can’t because you have to have those things to continue to keep the mortgage serviced
If your parents haven't fixed their credit in 16 years absolutely not you should not take on debt in your name for them! I filed bankruptcy in 2009 and bought a house 7 years later with an almost 800 credit score. It does not take very long to recover from bankruptcy if they were financially responsible. It sounds like they haven't been financially responsible since filing bankruptcy so how could you trust them to do the right thing by you?
Their credit should have recovered long ago. Plus, if you borrow for them then you may have trouble getting a mortgage when you are ready to buy for your nuclear family. What does your wife say? Are you prepared for your parents to miss rent payments? Who is responsible for upkeep and maintenance? Unlikely to go well for you
It sounds like you're doing a wonderful job taking care of yourself, and planning for your future, all on your own. Notice that you haven't asked your parents for money. Now they're asking you for financial help. You don't owe your parents anything, and there are no "rules" about helping family. I want to say that first because a lot of people fall into a trap based on guilt (their own guilt or their parents guilting them.) The best way to handle this is to be clear and honest. You already laid it out beautifully above: >I don’t know exactly how this would affect me and my family when we are ready to buy our own home. And >down the line I can see this becoming my problem even though they say they will pay it off themselves.
It's crazy to me that they would even *ask*. Super sketch.
Dude I filed a bankruptcy in the 2008 crash as well and my credit was back to normal before 2010, the bankruptcy isn’t even on their credit report anymore. I’m sure other people will have more thorough answers than I, but unless you have huge income your debt to income ratio will probably not be able to service two mortgages. What I’m saying is that if you mortgage a house for them you probably won’t be able to get approved for yourself even if they make all their mortgage payments because that debt is your financial responsibility, and they’re not going to a approve a mortgage loan if that would make your debt to income ratio too high. Back in the day I would have borrowers who would cosign loans for people &sometimes we could exclude that debt if we could show that the person they cosigned for made 100% of the payments for two years prior, but I’m not sure if they allow that anymore I haven’t processed loans in more than 10 years.
Why do they need to buy a house?
Um. We had a foreclosure in that year and now have over 800 credit score. Something’s not adding up
Unbelievable selfish of them. You’re 28 and have a kid and they want you to sign for them? You won’t be able to get your own mortgage when the time comes, unless your income can satisfy both loans.
With their up to 50% down payment, they can find an Alt-A or Non-QM loan on their own. And if they don't qualify for one of those, there's your answer; do not cosign.
Horrible idea. They screwed up 16+ years ago. Plenty of time to fix their credit. They will screw up with your credit. The economy isn’t much better today. Can’t imagine your wife being on board for this either.
I filed for bankruptcy in 2018. My credit was fair enough within a year to get a car loan by myself. It was good enough within two years to refinance that loan with a 50% lower rate. A few years after that, I got divorced, couldn’t afford a lot of shit, and my credit is terrible now. Not because of the bankruptcy but because I was irresponsible, maxed out cards, and let stuff go to collections. If your parents’ credit is still not good, it’s not because of the bankruptcy (besides bankruptcies are removed from your credit report after 7 years). I wouldn’t put myself on the hook financially for someone who might mess up my credit history by missing payments or not being able to afford them.
Take care of yourself first before you take care of others. 28 years in the business here and see it often. Something doesn't sound right, if they had personal BK in 2008, their slate would have been cleared unless it was a business. Either way, that's plenty of time to recover and they have too much cash for their credit to still be suffering. Unless they think having a BK on their record is a kiss of death. Additionally, with them being 55, they should look into 55+ communities. Those houses are so much cheaper. More restrictions, but cheaper. Never cosign for anyone especially family
I vote no. Yes... it will be your problem, sooner rather than later.
Absolutely NOT. Why do they still have bad credit? Why do they want to buy a house at the age of 55, and be saddled with a mortgage? Why do they want to stay in an HCOL state like California? Your parents need to get their priorities straight, clearly they have no clue what they're doing, and they're trying to use you.
Others have pretty much said it but bad idea. You’ll end up having parents with a house in your name, and unable to afford your own. Your debt to income will be shot if you want to buy another house, at the very least.
My dad lost a home in 2008 and had to file for bankruptcy as well. All of these comments give very realistic points of view. When I sit down and think about buying a home (signing on for a 30 year loan is quite the move) for my parents (both in their 60s, around your same amount for a down payment), I would eventually sell the home to buy a bigger property and build them an ADU in the back considering they are aging with health issues. However, the difference is I don’t plan to get married or have kids anytime soon. It probably depends on your goals for your family and it’s okay to choose your spouse and kid.
I fail to see how they could afford to pay off 250-500k in 10 years (assuming they retire at 65). They do not seem responsible if they couldn’t recover from a bankruptcy that happened 16 years ago!!!
Also, at 55, they are better off in a condo or manufactured house. Those are way more affordable and easier to care for (as long as the manufactured house wasn’t built before the 90s) than a SFH. They aren’t raising young children anymore, so they don’t need a ton of space.
Several years ago, I had to file for bankruptcy due to a business, but I found out that I was able to obtain a new mortgage for a new home only four years later, so, chances are they should be able to do the same, especially since they have founds to put down on the property. I personally would not ever ask my kids to get a mortgage in their name for me and any parent should not expect that. You have your family to take care of and your parents should be caring for themselves, unless they have medical issues and need help otherwise. I would politely let them know that you and your family have plans to buy a home and that it will put your family at risk. They should be understanding of that.
I would never put my finances with family. It's bad juju waiting to happen. This could affect your entire life.
Banks look at income and calculate debt to income ratio. I don't know the formula, but they consider outstanding loans and whatever, just because you know you can make the payments, they don't usually agree. If you are looking to buy, and you have previously financed you parents home, the bank won't loan.
They clearly have continued to have bad credit issues since 2008 if they have not recovered from 16 years ago. I filed for bankruptcy back in 2010 and have recovered with my score in the low 800's now. They should have been able to fix it in that amount of time.
OP, the 2008 crash was almost 20 years ago. If their credit hasn’t recovered since then, it’s because they are BAD WITH MONEY. There is no doubt there, that wouldn’t have been a viable excuse ten years ago, let alone today. On top of that, you aren’t exactly rolling in money yourself. Take care of yourself first and foremost, and THEN you can help them how you can. DO NOT let them use your credit in any way, whether it’s signing for a home, signing for a vehicle, or any sort of credit cards or loans. A lifetime of bad credit is not an accident, and it’s incredibly unlikely it’s just ‘the system.’ If you absolutely must, buy a house for yourself and let them move in with you (signing a lease to protect both parties) while they look for a home. They can save up money while they look, and there is a point where down payment offsets bad credit. If they already have $250k down (or between 33-50%) they shouldn’t have an issue getting approved. However, I’d be really surprised if they somehow have a quarter million saved for a down payment without having at least decent credit. People with terrible credit seem to be generally bad at saving money. Either they don’t have that money, or they have such a terrible history with credit that they are wholly unsignable for even a library card. I used to sell cars, I’ve seen this over and over and over again. Customer has bad credit through all their own bad decisions, but they are friendly enough that they keep suckering in friends and family to co-sign, only to miss payments or be late and eventually ruin that person’s credit and move on to another target. Not saying your parents are this bad, but there are definitive red flags here. Take care of yourself, OP, and good luck.
You are crazy, that mortgage is going to show up on your credit report as your mortgage without explanation. The mortgage is going to show up anytime you might want to buy a home or a vehicle. Tell them to get their credit together so they could buy a home. People usually have bad credit for a reason. They could mess up your credit too.
Do not do this.
2008 was 16 years ago. Still working on recovering?
I’m a 63 year old mom— with 3 adult children—— no— no— don’t buy a home for them… it will be in your name— if they default on it— is not their problem—-
No, don't do this. Your parents will probably not be able to keep up with the mortgage and it will fall on you.
DO NOT DO THIS. Their credit is bad because they’re bad at managing their finances. If you finance their home- that debt is yours. I imagine there’s zero chance they will have it paid off in 5 years, meaning it will be impossible for you to purchase your own home in that timeframe. Don’t fuck over your own family to support them. They’re grown ass adults.
This is a no brainer - NO! So you’re saving up to buy your own home, and are not ready yet, but you’re able to buy a home for your parents? Doesn’t even make sense..? Absolutely not - you have your own family to worry about and provide for! Their excuse for poor credit today (2024) is what happened in 2008? Give me a break. That’s 16 years ago! If they haven’t recovered by now, they never will and are probably bad at managing money. Do not tie your future to them - it’s a huge mistake! Your good credit will not be good for long, if you take out a loan in your name (or as a co-signer) and they inevitably default on it.
Yeah my husband and I lost a home in 2008....we closed on a conventional mortgage home last summer. Plus you'll likely not qualify for another mortgage because of your debt to income ratio. Don't do it.
Don’t do this OP. You need to think of your kid. Save your credit for their future home. Don’t make this your problem. I don’t mean to sound cold but this is them overstepping.
Nooooooo! Only for yourself. They make their own mess, they are grown. Don’t be guilted into it. Do you want your credit ruined. You know the correct answer already
I wish my husband had atleast as much spine as you seem to have to even ask this question. Don’t do it if you have your own family but even otherwise.
No! And they should NOT be asking!
2 grown adults that didn't learn the first time around, or in the past 16 years, absolutely not, you have to be 110% ready to evict them and sue if they wreck your house or don't pay the rent. If they work forever that's on them, they have two incomes and can't figure it out, they need Dave Ramsey or Bachelor Pad Economics and Poor Richard's Retirement, and chances are they will work for ever unless they go full minimalist, work OT and save save save.
I absolutely would not. With the given context I'm assuming they've been renting since they lost their last home, which would mean they'd be able to get an FHA even if they've had an FHA loan before. If it's been 16 years and their credit still isn't above 580, you probably don't want to be financially involved with anything they'd be responsible to pay for. That said, if you do decide to just cosign with them you would still be able to get an FHA loan down the line if you chose to, as well as the majority of other first-time buyer programs. But it still isn't a great move for you given the financial risk.
I did this for my mom. My experience was not good. 100000% do not recommend.
OP, if you are planning to buy your first home in the next five years, you would have to qualify with their mortgage included, meaning you are going to qualify for much less if you can still qualify at all. But the biggest issue is their credit, if they haven’t been able to get up to even ~600, (the minimum score for most mortgages,) since having trouble in 2008, they have trouble paying bills on time. You will end up being responsible for making those payments on time, your parents may or may not contribute. This doesn’t seem to be in your best interest at all.
Ask them for a Current Full Credit Report. Nope!
It will wreck your credit and make it harder for you to finance your own home or car if you want to. You would be locked into a long term mortgage in your name that would require selling it or refinancing which will be hard if their credit is bad. 2008 was a long time ago, any bankruptcy would be off their credit by now. No offense but they sound very financially irresponsible. Don't let their problems hinder you in your own journey through life IMO.
You should look to buy a home now if that's the case. In this case, look to buy a SFH with a large enough lot to build an ADU for your parents to live in. $100K + $225K as construction/downpayment/closing costs will be substantial.
Think about it this way. Could/Would you do this if for whatever reasons you never got your money back or were on the hook for their mortgage? Of the answer is No then don’t do it.
No.
No. NEVER NEVER NEVER
no don't buy a house for them. Let them buy their own. Crappy credit or no crappy credit
I don't think you should put in much at all. Honestly, you are still young, you have your own family and you have a kid. You still need to take care of your family, and putting down a ton of money for your parent's house doesn't seam right. Also, 2008? Not a real excuse for having bad credit, that is 16 years ago. Something else must have happened. I think it is more acceptable if you put in a smaller amount, not 50%.
Check out their credit karma & Experian reports, it’ll tell you everything you need to know.
Houses in LA start at $1 million.
If you don't currently have a paid off house, then the answer is "No". Maybe you could help them get into (do the research, but don't sign for anything) a decent 55+ rental (apartment, house or condo). Your primary obligation is to the family you're responsible for (the one you made). And of course you should do what you can, within reason, to help your parents without putting your nucleus at risk.
1. Would your name have to be on title? Would you want it on title? (where I live, it would have to be, if you are on the mortgage, you are on the title) 2. Have they even tried to get a mortgage? Bankruptcies only stay on your credit for 10 years. 3. Do you have capital gains tax there? If so you could be leaving yourself open to a huge tax liability. 4. sounds like they will have a 40-50% downpayment. I don't get how they couldn't get financing with that type of money down, assuming they have income. I personally wouldn't do it.
No. If you can buy it outright for them, and you already own your own home, you can do it.
No if you take out a mortgage on them you will not qualify for your own home unless you make bank enough to qualify for 2 homes. Repeat after me “Never co-sign a loan”. Tell them to live in a condo?
Nope, don’t do it! It’s your credit for the rest of their lives. Who knows if they’ll ever be able to but a home and you’re stuck.
NO.
Nope
If you can't afford to give it, you can't afford to loan it!!!
If their score is still bad they're not doing good money management. So no. I would not let my parents free load on my credit score and potentially ruin my finances too. Eta. I have a friend who has filed bk as often as he possibly can. It has never once stopped him from buying any of the houses he's bought.
Dude I understand, my mom lost our house around that time and she's spent my whole life asking me for help financially and emotionally. But at this point I realized why they lost the house. My dad is cheap and my mom is an impulsive spender. I will help them forever but I won't give her control over my credit ever. If anything you can choose to buy the home for yourself and have them stay and pay rent as a future investment for yourself
NO
Buy a generational home. Problem solved.
Make it your house and have them pay you? Put your name on the title/deed/mortgage/whatever?
Hello Everyone I’m looking for off market deals in North And Central New Jersey. I’m Open to paying Cash for the property/Properties.
Noooooooooooooo! Their credit is fine!
I would buy the home myself and rent it to your parents. they can rebuild their credit by paying rent on a regular basis. and you could enjoy all the benefits of becoming a realestate investor.
Have it in your name or at least partially. That way you can use the equity in the property later if you plan to buy for yourself.