husband wants to buy house with his parents

[Anonymous]

Anonymous wrote:OP here:

Some more details: I like my in-laws. They own a house in another area outright. If they sold, they'd get about 200K. They have been looking in Va, near here but not Nova. They can't find anything they like in their price range and are debt avoidant; maybe because of their age.

To be clear, they have money and to my knowledge, are not in debt. My FIL is a lawyer and my husband has an MBA. I love the idea of consulting an estate planner but DH won't go for it b/c he thinks that those two have it covered.

DH tried to compare my interest-free loan of 2K to my brother to this situation. My brother needed a car to get to work. They just want something bigger, fancier, and more land and no debt.

He keeps countering every single reason I have for not wanting to do this deal. We have investments and he says this is for diversity. All I know is that we live well below our means and could pay off all of our debts with our investments if we had to (car/house are only debts and that amounts to maybe 400K total).

I can think of many reasons to not do this and many are emotional. I need more logical reasons. You've given me some good ones. I mentioned the real estate fund and he said why pay somebody else to do something we can do.

What really pisses me off is that we have a lot of here and now boring stuff to do and he won't do that. Rather, he prefers to live in a fantasy world while the laundry goes undone, house un-clean, birthday party unplanned.

My biggest issue is I would loose my freedom to just quit my job if ever I had to do that. PP mentions some of those other situations and I suppose I could play the thought game but the reality is I will never agree to this so why waste time discussing it?

Final thing: My family is super poor. He would never buy an investment property where they live and make this deal with them but they are the ones who would most benefit from any largess we might possess. Frankly, I wouldn't either because, again, I worked hard, saved a lot and don't want to loose my flexibility.

If he thinks owning one house is the same as investing in a real estate fund, he has no idea what the words "fund" and "diversify" mean. It's funny how you can get an MBA without learning that sort of thing.

Stay strong, OP!

[Anonymous]

The $500k makes the picture a bit clearer. That is not much for a retired couple in their 60s who want a nice house in C'ville with only $200k equity in their current home (and that's a maybe - you don't know if they've borrowed against it).

A plausible scenario is that your ILs, averse to debt or not, simply can't qualify for the home loan on the fixed income they have. And DH and FIL don't want to admit this to you to 1) help FIL save face and 2) lock you into a long-term support plan. The "investment" angle is a smokescreen. Whether ILs were poor savers, made bad investments, or overspent, they clearly can't afford to buy the home they want in Charlottesville, and trying to make it happen on the backs of you and your DH without your consent is wrong. And so much more so that your DH tried to present this to you as a fait accompli and is sulking about it when you present the array of logical objections.

The odds that they would take advantage of their family status as your renters - and that your DH would let them - are very high. It's easy to imagine a scenario where they cry poor or want to take a cruise or even legitimately have a health emergency, then plead their case to your DH that they can't pay rent "for a month or two." And then you're stuck with the whole mortgage payment. That's the real risk I see with this deal - by holding the bag on the mortgage and "renting" to your husband's parents, you're totally exposed if they decide they need or want some charity from their son and he decides to give it.

[Anonymous]

Anonymous wrote:The $500k makes the picture a bit clearer. That is not much for a retired couple in their 60s who want a nice house in C'ville with only $200k equity in their current home (and that's a maybe - you don't know if they've borrowed against it).

A plausible scenario is that your ILs, averse to debt or not, simply can't qualify for the home loan on the fixed income they have. And DH and FIL don't want to admit this to you to 1) help FIL save face and 2) lock you into a long-term support plan. The "investment" angle is a smokescreen. Whether ILs were poor savers, made bad investments, or overspent, they clearly can't afford to buy the home they want in Charlottesville, and trying to make it happen on the backs of you and your DH without your consent is wrong. And so much more so that your DH tried to present this to you as a fait accompli and is sulking about it when you present the array of logical objections.

The odds that they would take advantage of their family status as your renters - and that your DH would let them - are very high. It's easy to imagine a scenario where they cry poor or want to take a cruise or even legitimately have a health emergency, then plead their case to your DH that they can't pay rent "for a month or two." And then you're stuck with the whole mortgage payment. That's the real risk I see with this deal - by holding the bag on the mortgage and "renting" to your husband's parents, you're totally exposed if they decide they need or want some charity from their son and he decides to give it.

+10000. If they stop paying, what will you do, OP?

The bottom line is that they can't afford this house. If they could afford it, they would be able to buy it without help.

[Anonymous]

Look at it this way, OP: A bank will not loan them the money. And a bank is willing to pursue the money much, much harder than you are. So if it's a bad deal for the bank, then it's a worse deal for you.

They want something bigger and fancier, want land, can't find anything nice in their price range-- wah, wah, wah! I want a solid gold toilet, but I would never ask my hypothetical future daughter-in-law to finance it!

[Anonymous]

I'm also wondering why people in their 60s would want MORE land, not less. One of the main things my parents - extremely avid gardeners, no less - wanted was a SMALLER yard. A big yard takes maintenance, and as they age that will mean paid help, which it sounds like you'll also end up paying for. Sounds like they and their son aren't very pragmatic people.

[Anonymous]

It might also be worth having a frank conversation with your DH about how much you plan/want to support your parents (yours too, not just his) and budgeting accordingly. This kind of open-ended plan he has in mind for his parents is not good.

[Anonymous]

OP, you already know that this isn't a good idea and it sounds like you have the tools to support your position.

My suggestion: your in-laws can sell their home, and buy outright a home not in NoVa, or even Centreville - but much further out, like Front Royal or something like that. Still close enough that you would see them plenty, but much more affordable for them.

I might be in the minority here, but I don't think people who are retirement age need to have 1 million right now. And if they don't have it, they aren't going to by any measure of scrimping and saving.

Retiring with 500k is perfectly doable if their house is paid for (with the 200k from previous home) and social security.

[Anonymous]

500k might get you by, if you're lucky and prudent, but it is nowhere near enough if you're planning on a significant lifestyle increase. Which is what OP's ILs are doing!

[Anonymous]

Anonymous wrote:It might also be worth having a frank conversation with your DH about how much you plan/want to support your parents (yours too, not just his) and budgeting accordingly. This kind of open-ended plan he has in mind for his parents is not good.

Excellent point! You need to talk about the big picture. And ask him what he would be willing to do for your parents-- not because you actually want to do it, but to make the point.

[Anonymous]

Anonymous wrote:

Anonymous wrote:A couple of things, OP.

1. Say no. You're the breadwinner, the responsibility and risk would be on you to pay this mortgage. If you don't want to do it, then don't. Pouting won't change things. Can your husband really pay the mortgage by himself?

2. I'm concerned about your relationship with your husband. You two should be a team, not him with his parents against you!

I'm a stay-at-home mother with no income. DH still includes my opinions into all the financial decisions and has never made one that does not benefit me.

I don't think OP is the only breadwinner, PP. I believe she just said she earns more than her husband.

Ok, then she is the *primary* breadwinner.

How does that change PP's points?

[Anonymous]

Look at it this way, OP: A bank will not loan them the money.

I don't think that's necessarily true. Older people get mortgages all the time and it sounds as if OP's FIL is still working - correct me if I'm wrong. One of the problems here is that OP's husband has just decided to be the bank because he thinks they can do it within the family instead of outside.

[Anonymous]

Op, it sounds like you have a child/children? Are they also dh's, or are they from your late husband? Either way, thus arrangement would put your ability to assist your kids in jeopardy in favor of assisting the inlaws . No way.

[Anonymous]

Wouldn't the $200 k down payment be subject to gift taxes?

[Anonymous]

If the parents are only in the 60's, they shouldn't be retired yet. With their current savings, they should work until 70. They need to move to a place where they can work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A couple of things, OP.

1. Say no. You're the breadwinner, the responsibility and risk would be on you to pay this mortgage. If you don't want to do it, then don't. Pouting won't change things. Can your husband really pay the mortgage by himself?

2. I'm concerned about your relationship with your husband. You two should be a team, not him with his parents against you!

I'm a stay-at-home mother with no income. DH still includes my opinions into all the financial decisions and has never made one that does not benefit me.

I don't think OP is the only breadwinner, PP. I believe she just said she earns more than her husband.

Ok, then she is the *primary* breadwinner.

How does that change PP's points?

I don't know the OP's income vs. her husband's. But "primary breadwinner" implies a major difference in salary to me. In my view, if one partner earns $120K and the other earns $110K, neither is the "primary" breadwinner. (I made up those numbers.) The PP is saying only the OP is at risk and only the OP is on the hook for the mortgage. But unless the OP is the only one applying for the mortgage, that's not true.