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Started By
Message
Advice on In-Laws and a Mortgage
Posted on 4/28/11 at 2:42 pm
Posted on 4/28/11 at 2:42 pm
I got married on April 16. I owned a house already so my wife moved in with me.
She was living in a house that her parents purchased but my wife co-signed. They made this purchase in 2008 while my wife was going into her Junior year of college at LSU. From what I can see, the reason they had her co-sign was twofold:
1) Build her credit
2) Better interest rate
My wife's younger sister by 1 year also moved into this house. They got two more roommates (4 bedroom house) and the four of them have split the mortgage over the last few years. As of January of this year all had moved out but my wife and so she has been paying the whole mortgage since then.
The parents put down 3.5% on a thirty year mortgage. Now the house is worth ~200k and they owe ~185k. If we get it sold we will basically break even with fees. The house is going on the market today.
My problem/question is that while the house is on the market, my wife's parents are making us pay for half of the mortgage. Is this fair?
To me it seems like THEY were the ones that made this purchase in 2008. THEY were the ones that decided on a 30 year mortgage (thus no equity now). THEY were calling that shots. My wife had no idea what she was getting into then. She was only 21. We had just started dating as well so it wasn't my place to say anything then.
Also, I'm scared that they're asking price is too much and we will be making this payment for several months. I don't want to even think about having to take a loss on the sale and them coming to us for half of the loses (I asked them if this would be the case and they said we'd talk when/if it happens).
My question for the money board:
Am I being unreasonable to think that this should be 100% their responsibility and not have this burdon on the newly married couple?
She was living in a house that her parents purchased but my wife co-signed. They made this purchase in 2008 while my wife was going into her Junior year of college at LSU. From what I can see, the reason they had her co-sign was twofold:
1) Build her credit
2) Better interest rate
My wife's younger sister by 1 year also moved into this house. They got two more roommates (4 bedroom house) and the four of them have split the mortgage over the last few years. As of January of this year all had moved out but my wife and so she has been paying the whole mortgage since then.
The parents put down 3.5% on a thirty year mortgage. Now the house is worth ~200k and they owe ~185k. If we get it sold we will basically break even with fees. The house is going on the market today.
My problem/question is that while the house is on the market, my wife's parents are making us pay for half of the mortgage. Is this fair?
To me it seems like THEY were the ones that made this purchase in 2008. THEY were the ones that decided on a 30 year mortgage (thus no equity now). THEY were calling that shots. My wife had no idea what she was getting into then. She was only 21. We had just started dating as well so it wasn't my place to say anything then.
Also, I'm scared that they're asking price is too much and we will be making this payment for several months. I don't want to even think about having to take a loss on the sale and them coming to us for half of the loses (I asked them if this would be the case and they said we'd talk when/if it happens).
My question for the money board:
Am I being unreasonable to think that this should be 100% their responsibility and not have this burdon on the newly married couple?
13
Posted on 4/28/11 at 2:56 pm to Sweetness
If your wife co-signed for the house, she is legally on the hook for the mortgage.
I think her best bet is to tell the parents that if she's paying half the note, she get's an equal say in the selling process (ie price negotiations).
If they want her to foot half the bill but they have all of the authority then you have yourself a problem.
I think her best bet is to tell the parents that if she's paying half the note, she get's an equal say in the selling process (ie price negotiations).
If they want her to foot half the bill but they have all of the authority then you have yourself a problem.
Posted on 4/28/11 at 2:59 pm to Sweetness
Who is claiming the mortgage interest tax deduction?
Posted on 4/28/11 at 3:03 pm to tigerzfan2000
is she on the mortgage or on title?
Posted on 4/28/11 at 3:11 pm to Sweetness
quote:
I got married on April 16.
you really want to start shite with your inlaws already?
we're talking about around $450/month for a few months. It's not worth fighting about IMO.
Posted on 4/28/11 at 3:24 pm to TortiousTiger
quote:
you really want to start shite with your inlaws already?
we're talking about around $450/month for a few months. It's not worth fighting about IMO.
This. You should post this to the OT. This isn't a mortgage problem, this is an In-Law problem.
Posted on 4/28/11 at 3:29 pm to Sweetness
Reread. Nm
This post was edited on 4/28/11 at 3:31 pm
Posted on 4/28/11 at 3:37 pm to Sweetness
Why did they buy the house?
Did they ever live in the house?
Did they ever live in the house?
Posted on 4/28/11 at 3:44 pm to TortiousTiger
quote:
you really want to start shite with your inlaws already?
we're talking about around $450/month for a few months. It's not worth fighting about IMO.
I understand.
But it's more like $850 a month for us when you include water/trash/utilities/insurance/taxes.
Also, it may not be a few months. It's indefinite at this point...
Posted on 4/28/11 at 3:45 pm to Newbomb Turk
quote:
Why did they buy the house?
Did they ever live in the house?
The parents bought it because they thought it made sense financially over renting for their two girls. Since they had two girls going to LSU.
Posted on 4/28/11 at 3:47 pm to tigerzfan2000
quote:
Who is claiming the mortgage interest tax deduction?
Great question! I remember asking them a few months ago because I was getting ready to do my wife's taxes. I thought maybe they would let her claim the interest, but they definitively said no, that they would be claiming it.
Posted on 4/28/11 at 4:09 pm to Sweetness
quote:
The parents bought it because they thought it made sense financially over renting for their two girls. Since they had two girls going to LSU.
That makes it a little harder.
Are they asking the other sister to contribute? If they bought it for "them" because they were both at LSU, and they think your wife should pay because they bought it on "their" behalf, it would seem only fair to make the other sister pay a part.
It's not to difficult to figure out what happened. The parents were probably paying (or helping) with living expenses while the girls were at LSU. Then, the saw an opportunity to make a profit. Their idea was to buy the house, let the girls live in it. Then when they left LSU, they could resell it and make a nice little profit. I had friends whose parent did that when I was at LSU. It always seemed to work to the extent that the parents wound up making more than they actually paid throughout the years.
And, of course, housing prices always go up, right?
OOOOoooops. It backfired this time.
The question to ask the parents is -- Had this house increased in value to $300K, would they be splitting the profits with you?
If they are honest with you (and themselves), they'll recognize WHY they really got into this situation.
Posted on 4/28/11 at 4:25 pm to Newbomb Turk
quote:
That makes it a little harder.
Are they asking the other sister to contribute? If they bought it for "them" because they were both at LSU, and they think your wife should pay because they bought it on "their" behalf, it would seem only fair to make the other sister pay a part.
It's not to difficult to figure out what happened. The parents were probably paying (or helping) with living expenses while the girls were at LSU. Then, the saw an opportunity to make a profit. Their idea was to buy the house, let the girls live in it. Then when they left LSU, they could resell it and make a nice little profit. I had friends whose parent did that when I was at LSU. It always seemed to work to the extent that the parents wound up making more than they actually paid throughout the years.
And, of course, housing prices always go up, right?
OOOOoooops. It backfired this time.
The question to ask the parents is -- Had this house increased in value to $300K, would they be splitting the profits with you?
If they are honest with you (and themselves), they'll recognize WHY they really got into this situation.
Thanks for the input.
They are NOT asking the other daughter to contribute which another great point. Granted the other daughter moved out a few months before my wife and also she is not on the mortgage. But it seems to me they were buying this house for the benefit of BOTH daughters.
Regarding your question to ask them about the value increasing to $300k, that is a great question, but do you thinking it would be arrogant to ask? I'm just reluctant to say anything to them but don't want to get screwed.
Posted on 4/28/11 at 4:37 pm to Sweetness
Don't be reluctant about anything, you are getting fricked pretty good here.
Posted on 4/28/11 at 6:32 pm to Sweetness
quote:
Regarding your question to ask them about the value increasing to $300k, that is a great question, but do you thinking it would be arrogant to ask?
Perhaps you can frame it another way.
Even if you have no intentions of renting the house, you could go to them and suggest that due to the fact that you might be in a position of having to come to the table with money, perhaps a better solution would be to rent the house. That way, you can wait out the housing market, and, when the value of the house goes up, y'all can split the profits.
See what their reaction is. If they wonder why should they split the profit -- you've got your answer. If they agree, maybe you might want to think about renting it out.
Posted on 4/28/11 at 7:05 pm to Sweetness
quote:
If we get it sold we will basically break even with fees.
what if you don't? Do y'all get 1/2 the profits/ owe 1/2 the debt?
Posted on 4/28/11 at 7:44 pm to Sweetness
Haven't read the thread but the answer is no.
Posted on 4/29/11 at 7:59 am to Sweetness
Pay half sell the house move on.
Posted on 4/29/11 at 9:11 am to Camp Randall
I'm trying to summarize my questions/concerns/arguments toward them. Any feedback would be appreciated.
1) What was the reason for buying the house in the first place? It seems to me like it was a place for both <wife> and <sister> to live at the time and perhaps everyone saw buying over renting the more financially viable option? If that's the case then where does <sister> fall into all of this? By no means am I trying to get her into this, it's just a question I have.
2) One thing that makes me uncomfortable is how many unknowns are involved. If we simply had to pay $867/month for the next, say, three months, I can wrap my head around that. It's the fact that it's indefinite at this point that worries me and also the fact that I don't know what is going to happen if it doesn't sell. I get the feeling we will be responsible for half of any losses. If the house value had risen to $300k instead would we also be splitting the profits?
3) If we are splitting everything down the middle why did you get to claim the interest?
4) I feel like we have half of the bill but none of the authority. I didn't realize we would be responsible for this until April (and maybe that's my fault for not asking sooner). If I had known all along I would have tried to get it on the market MUCH sooner. Why didn't we try to do this more like January? I did the yard and the pressure washing and would have been happy to do more had I not been two weeks away from getting married. I feel like we aren't really involved with timing, which real estate agent to use, price points, etc. I know you have spent a lot of time on all of this and making the best decisions but I'm not one to typically just sit back and watch.
1) What was the reason for buying the house in the first place? It seems to me like it was a place for both <wife> and <sister> to live at the time and perhaps everyone saw buying over renting the more financially viable option? If that's the case then where does <sister> fall into all of this? By no means am I trying to get her into this, it's just a question I have.
2) One thing that makes me uncomfortable is how many unknowns are involved. If we simply had to pay $867/month for the next, say, three months, I can wrap my head around that. It's the fact that it's indefinite at this point that worries me and also the fact that I don't know what is going to happen if it doesn't sell. I get the feeling we will be responsible for half of any losses. If the house value had risen to $300k instead would we also be splitting the profits?
3) If we are splitting everything down the middle why did you get to claim the interest?
4) I feel like we have half of the bill but none of the authority. I didn't realize we would be responsible for this until April (and maybe that's my fault for not asking sooner). If I had known all along I would have tried to get it on the market MUCH sooner. Why didn't we try to do this more like January? I did the yard and the pressure washing and would have been happy to do more had I not been two weeks away from getting married. I feel like we aren't really involved with timing, which real estate agent to use, price points, etc. I know you have spent a lot of time on all of this and making the best decisions but I'm not one to typically just sit back and watch.
Posted on 4/29/11 at 9:28 am to Sweetness
SOunds like a good plan, i would suggest typing the questions and bringing them with you so you don't get side tracked. Nip it in the bud
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