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My MIL has lived/rented in the same house for 20 years and earlier this year the owner died from old age. Well, the property mgmt company wants to sell it and asked her if she would like to buy it for $140k. My MIL lives off her SS and her very p/t job (10-maybe 15 hours a week) so she can't afford it. My SIL recently (June) moved in because her work contract ended, and she decided she didn't want to teach English overseas anymore. She's currently unemployed but working on a certification for a job she's eyeballing. She tried to get a home loan to buy the house but of course she was denied. Now they are looking at my husband for help and he wants to help. My issue is that it would add another $500 to our mortgage payments and increase our total home loan. I told him if it was short term like a year or maybe 2 ok, but it's not. He's an amazing husband, father, brother, and son and I'm glad he's who he is BUT I don't agree with this. I think his mom needs to move into a senior citizen home and not put this kind of responsibility onto her kids because she doesn't want to move. Am I wrong for feeling like this? Has anyone refinanced their home for a parent?

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November 3 question.
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I am not sure the bank will allow you to do this…. When DH and I took out a loan against our home to have the roof replaced the bank wanted to know this. They are going to make sure it’s a good financial decision for them as well.
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No one should cosign, or the remaining co-owner will be responsible for the house payments and upkeep unless that person can afford to pay the bills if the affected co-owner should lose income.
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JoAnn29 Dec 2022
OP has not returned since originally posted. Post is over a month old.
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If you and husband want to buy the house as an investment, and it really is an appropriate investment property, then do it. Otherwise don't. And DON'T lend that money to MIL even with SIL, or co-sign with them!
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I have been thinking about this for a day or so. (what a life!)
What would happen if you or your husband were to lose your jobs or were forced to cut back drastically on your hours?
What would happen if you or your husband were to have an accident and be unable to work for 6 months or so?
You say MIL has been renting this house for 20 years. How old is the house? 20 year old house is one thing a 50 or 100 year old house is another.
What renovations will have to be made to the house in order to allow MIL to remain? Will there need to be an accessible bathroom done? Is there a first floor bedroom that she can use if she can not do stairs? (unless this is a ranch house)
How much work can you and or your husband do when the house needs repairs?
If you are living in a cold area are you ready to shovel and plow that driveway and sidewalk and do yours as well? And the lawn in the summer.
And is $149k the market rate or is there a bit of a break since she has rented for so long?
Is this an "as is" sale and no inspection? Is there work that needs to be done?
Will all repairs be done before the sale closes?
And the biggie....
Will you get your money back?
When MIL dies will the house be sold and you recoup your investment or will SIL take up permanent residence and you will be landlords for 20. 30, 40 years?
If MIL and SIL will be paying you rent at either the same rental or a bit higher this might not be a bad deal. But I would not do it unless
1. I had enough that if I was unable to work for a while I would still be able to pay the mortgage.
2. MIL and SIL sign a rental contract and they pay rent at an amount that will either pay the mortgage each month or at a rate that would be customary in the area for a house.
3. It was safe for MIL to remain there.
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Buying the house might be a very good investment for your MIL and SIL, giving them some security. Your husband may want to do this. What if your husband loaned them the money? He can give them a good "family" rate of interest. Loans to family members should have a contract and re-payment schedule. They'd be paying back the mortgage they need to take out and the loan to your family.
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PeggySue2020 Nov 2022
I’m sorry but no
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You are not wrong to feel as you do as this is a terrible plan. I'm not sure how your DH thinks this is a sound idea. Aside from adding to more of your own debt, does DH not remember that home ownership involves much more outlay of money than the monthly mortgage payment? And trust me stuff will happen. Who is going to cut the lawn? Who is going to pay $7K or more for a new roof when it starts leaking? What happens if something goes drastically wrong with the plumbing and you have to shell out thousands of dollars to fix it? Tell DH to get his head out of the clouds and come back to earth. And I mean that nicely :)
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Lantana Dec 2022
And have to pay property tax and insurance
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Oh my gosh! Think of all the additional interest you will pay and you will probably NEVER pay off your loan. Yes, sometimes it's just time for people to downsize. Her desires shouldn't take such a huge toll on your family's finances. Even if mom were to leave him the house, he might never be able to (legally or emotionally) get his sister out of there.
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TXliving75: Absolutely do not do this as you need to build your own retirement. It's not advisable to foot the bill for parents' needs.
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Why can’t your husband buy the house and have his sister who lives in the house pay rent to the tune of the additional $500 it will cost. That is cheap rent. I would charge her $700 or $800 a month to include the cost of maintenance
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Geaton777 Nov 2022
Because this may not be sustained... if the sister loses her job or something happens where she can't pay rent or make ends meet, it is a disaster for the OP. This sister is currrently unemployed. Not a good start.
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That is a bad idea. The best thing to do would be to find her a smaller home or Senior living apartment, allow the daughter to live with her if she needs assistance throughout the day while she is looking for a job. Keepyour finances separate.
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Absolutely stick to your guns. This is a terrible idea--unless, of course, you and your husband are multi-millionaires who can buy and maintain an extra house and still have the money to finance your own retirement.

I am 71. My husband and I sold our home in the east and moved to the west coast about 7 years ago. We did this partly to assist my sisters care for my mother, partly to get out of the high cost of living area where we were located. We opted to put the cash from our previous home into an investment account and move into a rental property. The income from the investments more than pays for the rent. We have a beautiful place with a longish-term lease and we have no worries about the many costs of maintaining a house. We love it. I don't think that your husband's generous offer would turn out quite the way he expects. Compared to owning and caring for property, living in rentals is a simple and convenient lifestyle.

If your MIL has always rented she is not prepared to deal with the many costs of home ownership--even if she can afford them. Off-hand, I would say she probably could not. In our area a new roof starts at about $5K. If the house has not been re-roofed in the last 10 years, that will soon be due. Major appliances need replacing at regular intervals also. Then there is the painting of the exterior that needs to be done every 5 years. Yes, rent is higher than the PMI on a mortgage for the same property--but that is because the rent also takes care of all maintenance and property taxes on the property, including the headaches of getting all the bids.

Beyond all that, though, is the fact that it is your MIL's responsibility to take care of her living arrangements, not you. I would never allow my sons to make such a huge investment in my living expenses. They are 50 and need to be investing in their own futures. My husband and I feel that we have enough for a comfortable life for the 15 or 20 years that remain to us. If we do run short of money in our later years we have every intention of making do with lower cost options.

Also, bear in mind that you would probably be taking on a 30 year commitment for someone who is most likely not going to live that long. Probably before the mortgage would be half paid for your MIL will actually be better off looking at AL. Part of the reason we are renting is that we have much more flexibility in our housing that we would have if we had purchased a house. Waiting for the markets to go up or down on real estate is not a good thing to have to consider when a broken hip dictates a move to a steps-free environment! Your MIL sounds like she is really healthy now, but at our age things can change really rapidly.
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The only question here is Can you afford $500 extra per month?
Draw up a plan of how you can or cannot afford it and show it to husband.
Sometimes seeing it on paper makes it easier to accept or decline.
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I do see that your husband is trying to solve a problem, but it doesn't seem you think the finances are going to work out well. Intuition, facts, whatever, in adding up the numbers, can it work? Could you help him look into another solution for his mom? I'm 74 and would never let either of my sons take out an extra mortgage for me. If I were to lose this house I bought 20 years ago, that's my problem, not theirs. I thought a lot about my situation as I watched what happened with my parents. They planned well financially, just didn't know that Alzheimer's would hit her and that he'd fall and break his tail bone. These are the kinds of things that happen though. I think about how much longer I can care for my house? Maybe another 7 or 8 years. Will I be able to afford to pay for yard and garden work like they did or will I have to sell this house I love and find another place without a yard. Downsizing would mean giving up my studio too. I hate the thought of it all, but that's life. My sons will offer help with moving me and such, but no way are they to give me any money or put themselves in debt over me. Maybe I'll let them bring me groceries on occasion, help me find the help I will need, and basically watch out for my well being, but NO money coming my way from them. It goes the other way. I will help them with money instead if they need it and I'm able. Now, if I should get Alzheimer's, I have it all written down for them how they should manage my care, so if I'm at some point not able to think clearly, they will know what I wanted when I had a brain.
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Dear Dr. Laura had an expression : "No good deed goes unpunished". Is she still on the airwaves somewhere? I miss her.
No, no, and no would be my advice. I don't say you don't have a good man there, because clearly you do. But I think he is misguided and I would go to counseling with him with a licensed Social Worker in private practice or a financial planner before I attempted to do this, with a whole raft full of reasons that I could go into but I would bet you already considered. Including that, should your Mom need care in future and medicaid, the claw back for care would gobble that home up in one bite.
IF you do this, insuring her home, then I think HOW you do it is worth passing past a real estate attorney.
Please proceed with caution and watch for those triangular yellow "CAUTION " signs, because I want only the best for you and your kind guy.
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polarbear Nov 2022
Alva- you can find doctor Laura on siriusxm channel 111 at 11 am daily, or on the web at drlaura dot com. Since she moved away from free radio, I haven't listened but sometimes I do listen to the daily "call of the day" which is free on the web.
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I know a couple who refinanced their home and invested in rental properties with success — and historically low interest rates. A few years back they rented to appreciative family members who pay on time and no issues.

I’d ask DH to put emotions aside and justify it as a good business investment.

Are you giving up a low interest rate on your house to refinance a higher loan amount at a higher rate?

Since sis is unsure of her future, can mom pay the full rent and cover your costs?

How many years are you talking? How does renting from DH compare to paying for assisted living? Around here, AL is easily $60,000/yr.

If mom’s in AL and can’t pay, does Medicaid kick in? If yes to AL, but not rent, that’s money DH is leaving on the table.

It seems Mom has been consistent in paying rent but would she stop paying rent because it’s her son? Then what? Would DH evict his mom?

Would mom settle into AL better now than when health issues force it?

Is your property manager DH ready to run over every time something needs to be fixed?

Is the $140,000 a 2022 inflated bubble price and the value will go down?

What renovation does a 20 yo house? Will DH give up his weekends for home reno?

Is the property a good rental if mom needs to move?

The house would be in your name. Would that affect your ability to borrow for other purchases? Like a car?

If DH can address all these concerns, go for it.
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polarbear Nov 2022
Erikka - Bullseye!!! ALL these are very important questions to ask. Anyone of these issue can come back and bite them in the behind big time.
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He is the way he is and that’s why you love him. If his moms SS is enough to pay the taxes Maybe you could purchase the house in your name and tell mom and SIL they can live there for a nominal rent (for the upkeeps). I wouldn’t count the income from her part time job which could abruptly end for various reasons. You found a good man, congratulations.
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DON'T DO IT! You cannot afford to buy this house. Paying $100,00 for a home is expensive in addition to upkeep on this 20+-year-old building. Financing requires a steady full time job. With a possible recession coming, job security is unknown and may spell financial disaster, possibly placing its occupants on the street. Mother should go to senior living or AL.
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Wow, taking on $100 K is an extreme burden. You are certainly justified in refusing this imposition. Sadly MIL and sis have put you in the middle. Shame on them. Hoping your sweet husband can find the courage to refuse.
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My mother got involved in a real estate situation with one of my brothers 26 years ago after my dad had passed away. It was a mess. My Mom died in 2016. It took me until 2021 to get completely untangled from my deceased brother's children. Beware of financial dealings with relatives.
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In reading the posts its brought up that the sister is living there, the sister can care for the mother. The sister has been living overseas. There is no guarantee that she will stay living with Mom. She could get her dream job and move away. Then TX and husband are left with a house they don't need and no one to share the rent or mortgage with Mom.

If Mom cannot afford to buy the house and do the upkeep, then the son should not buy it for her. At 74 she needs to downsize. Its not fair that she may put her son in financial straits.
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TX, I image your gut feelings to say no on this have been validated.

Where's your DH's thinking at?

Today, I just realised how similar (in thinking) this is to the Husbands who say "Mom is moving in".

It's their Me-Man-Fix-It for you Momma instinct that kicks in. It comes from a place of wanting to help. But it is a knee jerk reaction. A *reaction*.

But this isn't just fixing a light globe or a leaky tap..

This would be an ongoing financial burden + ongoing maintenance labour (no doubt too) - so MIL can avoid the emotional upset of downsizing & moving house.

A financial burden for you & DH. So MIL can avoid change.

This is more like setting yourselves on fire to keep MIL warm...
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How much rent is your MIL paying for this place? If the $500 a month added to the mortgage is less, and she pays that to you and DH in lieu of rent, this might actually become quite a good investment. Is the house suitable for MIL's needs for the next 10-15 years, all being well?
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Beatty Nov 2022
Good points.
Friends have parents that 'rent' from them. But the property was purpose built, designed especially for aging. Financial advice was sought & the deal worked for all sides.

Downside they cannot sell without huge impacts. They are responsible now for their folks housing.

I have other friends, a little older. Unexpected retrenchment & health issues led them decide to downsize, refinance & move to a good area for an active early retirement. They sold their investment property without much ado. It did not contain their family members.

Factors to consider I suppose.
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20 year house is probably gonna need some expensive repairs and maintenance is ongoing. The 500 addition to the mortgage may not be the biggest problem. Who will pay for all that? Why not just find her a similar place for the same rent. I understand she doesn’t want to move but sometimes that’s just the breaks.
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Kmjfree Nov 2022
Also what is the interest rate on current mortgage vs if you refinance. Higher interest is just wasted money.
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Just buy the House - If your MIL has your SIL Helping her that is a win win situation . People who end up in nursing homes dont last very Long .
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Daughterof1930 Nov 2022
“People who end up in nursing homes dont last very Long” Perhaps that’s due to the fact that the vast majority of nursing home residents have health conditions that are extremely life limiting or terminal? Or that they are simply nearing the natural end of their lives? Otherwise, please provide the documentation behind your quote. My parent “lasted” for four years, without one fall or bedsore, without one instance of mistreatment. And it was still gut wrenching for her to live there for our entire family, a choice made from a complete lack of any other choice. Please know that ignorant comments like this don’t help anyone and only pour on grief to people already facing, or having faced, impossibly hard situations
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Think about what would happen long term. If SIL ends up caring for mom in the house and something happens to mom you might have a heck of a time removing SIL from house.
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JoAnn29 Nov 2022
I don't think the sister is going to stay around. She has worked overseas, she can do it again.
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That has got to be one of the worst ideas I’ve ever heard.
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If you guys do this, I really recommend you don't but, if you do, BEFORE you sign any papers, get with a real estate agent and find out what the comps are for that neighborhood and get inspections done, these 2 things will let you know if the management company is soaking MIL on price.

It's hard to believe that MIL can afford $1,400.00 monthly rent. That is what they would be charging if the house was worth 140k. Standard rental rates are 1% of the value.

Do you know if she has a triple net lease? This would be what you guys would do with her, it makes her responsible for ALL insurances, property taxes, maintenance and repairs.

Is her area falling apart or revitalizing? This is really important to know, because a neighborhood falling apart will devalue your house. It makes it hard to rent and it can turn into a slumlord situation.

This isn't a simple bailout, this is an investment that directly effects your investment in your house. Which, for most people, is the biggest investment they make in their lifetime.

I find it incredibly selfish of your MIL to put you guys at risk so she doesn't have to make any changes. Oh and SIL needs to get a job, any job, while she is getting her certificate. To expect her mom and brother to support her is just gross.
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In a marriage, this will decrease your joint marital assets (equity in your own home).
It will increase joint marital debt.
It will increase your joint monthly expenses.

Not an investment, but a very risky change in assets.

I agree with other's comments, do not borrow to invest.

You also need to consider how this would affect you financially in a divorce.
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Everything about this screams bad idea. I’ve seen firsthand the heartache that comes from mixing family and finances and heavily encourage you not to do this. It will only lead to further expectations of your husband being the answer to life’s issues
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