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Hi all!

I have about half a billion questions about mortgages and buying a house. I'm going to attempt to list a few of them here and hopefully y'all can help me out. ('Cause you all are most helpful people!) (and smart too!)

my background - I am living with my elderly parents - have been taking care of them for the past 10-15 years. I've been not working for the past... 5- 7 years. I currently don't have an income. I also have no expenses. well minimal expenses: car insurance of approx $300/yr, student loan payment - currently $0/mo (income based). (LBYM is my daily mantra)

Now having said that - Here's what I want to do: I want to move out of my parents house into a house in another state and get a job. (and a life!)

I've gone round and round with this for quite a while (couple years at least)
I could:
1: get an apartment in the area I want to live and find a job to pay for it. Apartments are $600 and up (utilites not included) I would need cash up front to do this.
2. getting a job while living here is not an option. Parents are too distracting, and would be calling me at work all day. IE: cant work 2 full time jobs at the same time.
3. my ideal would be to buy a house with a rental apartment and get job and use rent to pay mortgage.
4. Buy a fixer upper for cheap and get job to pay inexpensive mortgage payment. (50k or under) (most likely 20-30k)

Having stated those goals - I would need the following:
A. Help from my parents to obtain mortgage or cash funds. Being very intimate with their finances, this is very possible.
B. Time to get a job
C. Plans to pay back my parents and/or get financing on my own.

With all of this in mind I have found a house that is a fixer upper with room for me and my dog and cat. (did I mention my Border Collie? another reason apt living is not a viable option.)

The house is listed for $27,000. It is in an area with readily available work in my field. It is an older house 1890's with 4 bedrooms, 1 bath. It needs a good deal of cosmetic work, electrical, and the kitchen has effectively been removed. I have seen the house, it has newer oil forced air furnace with a power vent. Chimney would need to be replaced, it's crumbling, but is not being used by the furnace. So I would think it wouldn't need to be done for occupancy. Foundation seems solid. I did not get to test plumbing but bathroom is old but intact. It's functional.

I am very handy and have been doing plumbing and electrical at my parents house for years. (also an 1800's house) Paint, plaster, sheetrock, etc. I have most of the tools I would need to update and do the cosmetic work. I also have a kitchen unit that has a 2 burner elec stove, a mini fridge and sink, that could be moved in and hooked up. Effectively providing me with an instant kitchen. I can run electrical lines, but would need to hire an electrician to update the electric box to 100amp breakers, instead of the fuses that's already installed. (I managed to get someone to do that here at my parents house for @ 1k. a few years ago. I paid for all the supplies, they just did the labor.)


Having said all of that, my problem lies in the fact that the RE agent I talked to - a buyer agent - told me that it would be a cash sale only. I was told it was not a foreclosure. As I understand it, it is owner owned. I don't understand why it is a CASH only sale. I was told I could not get a mortgage for it. Can anyone explain this to me? Is this because it's not a move in ready property, by their standards? (personally I could move in tomorrow, use a kerosene lantern and pump water by hand, I'm not particular. or I could use a generator...if I wanted to be fancy) :)

Now - If I could get a mortgage for it: Can I
1. get a mortgage in my name with my parents co-sign?
2. have my parents get a mortgage and later put me on the deed?
3. have my parents get a mortgage and later sell to me?
4. be a first time homeowner in any of these options, and would it be worth it to be a first time homeowner?

If I can't get a mortgage and it's cash only:

1. Can I use my dad's credit cards and pay cash for it, and immediately turn around and get a HELOC to pay off the credit cards? (with dad's approval of course)
2. What would be my closing costs on a CASH sale of this nature?
3. Can I use my dad's credit cards and pay cash, then turn around and immediately get a mortgage in his, or mine or both our names?

As far as occupancy goes:
1. Would I have to install a modern kitchen in complete to satisfy a mortgage company, or can I install my mini kitchen and update at a later date.
2. I am assuming that any mortgage I get would need to have electrical updated and fixed. (brought up to code) Can I get a HELOC after paying cash, using HELOC money to bring it up to code?
3. As I understand it, Refurbish Mortgages will only pay a contractor to do the work on the house and will not allow you to do your own repairs. Would a refurbish mortgage be available for a listing that is "Cash only"

(I'm having a really hard time understanding this "CASH Only" caveat on the listing.)

I know I have a half billion more questions, but these are the ones I have to start with. Any and all information will be helpful. Comments that "It can't be done" will not be accepted. Because, I know there is always a way to get something done if you try hard enough. Snark's need not apply! :)

TIA for any and all information.
Lady Ianna
(sorry it's so long)


btw.. my credit scores are in the 650 and up area. Not great but not horrible. I expect that once I get a job and start paying bills again, they will go up. (as long as I don't get myself into any additional debt, pre-mortgage.)
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This is a cash only deal most likely because something is so wrong with it that it will not pass inspections such as septic that would be needed to obtain a mortgage, or it is not expected to appraise.

You don't have the funds, you don't have the income, would have to borrow even to buy the place. Buying a fixer upper without an emergency fund is foolish, IMO. How about prepaids such as insurance and taxes? That will be necessary even with a cash deal. In addition, how certain are you that you are not going to head back to take care of your parents? If they've needed help in the past the future is unlikely to be better. Been there, done that, have the T-shirt. There are boards here on TMF to help with that too. http://boards.fool.com/taking-care-of-parents-116503.aspx?mi...

If you are insistent on taking on this folly, see if the seller can take back a mortgage. Sounds like he has little to lose. Try for 100% funding, in fact. That keeps the majority of the risk on him in the event there is a fatal flaw with this property. I got private financing like this on an extreme fixer upper, an estate that had been vacant for 3 years. What sold it was going and talking to the son who inherited it and convincing him that I was capable of improving the property and paying him back. Perhaps an interest only 5 year note, which would allow you to get back into the working world, and allow you to spend what you had for materials to go with your sweat equity to improve the property.

Sorry I couldn't be more help. Good luck with exploring your options.

IP
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Hi Lady Ianna,

I don't understand why it is a CASH only sale. I was told I could not get a mortgage for it. Can anyone explain this to me?
Unfortunately, none of US are THE SELLERS (at least I kinda doubt that kind of coincidence ;~)

In general, a seller might demand so short a closing timeline that you don't have *TIME* to arrange a mortgage... or they may specify that they won't cooperate with a V.A. or FHA mortgage lender (who sometimes make rather idiosyncratic demands of the sellers and the property, not just the buyers.)

However *ALL* bank-lender sales *ARE* 'cash sales'... as 100% of the seller's proceeds (minus their own transaction costs that exist regardless of the buyer's sources of funds) are from cash.

To flip it over, all CASH sales are *FINANCED* sales... as the money has to come from SOMEWHERE! If you borrow/withdraw it from an investment account averaging an 8% return, its the exact same thing as borrowing it at an 8% interest rate.

So... if you really wanted to, you could make an offer 'on a cash basis' and still completely ethically and morally apply for and get that cash from a mortgage lender, assuming you make the appropriate deadlines.

Now - If I could get a mortgage for it: Can I
1. get a mortgage in my name with my parents co-sign?

Yes.

2. have my parents get a mortgage and later put me on the deed?
Probably

3. have my parents get a mortgage and later sell to me?
Sure

4. be a first time homeowner in any of these options, and would it be worth it to be a first time homeowner?
Irrelevant... you have no employment history nor income, so you won't qualify on your own in any case.

If I can't get a mortgage and it's cash only:
1. Can I use my dad's credit cards and pay cash for it, and immediately turn around and get a HELOC to pay off the credit cards? (with dad's approval of course)

By yourself? No... see above.

2. What would be my closing costs on a CASH sale of this nature?
I'd SWAG it at around $500-$1,500 tops.

3. Can I use my dad's credit cards and pay cash, then turn around and immediately get a mortgage in his, or mine or both our names?
By yourself? No... see above.
Together, yes...

As far as occupancy goes:
1. Would I have to install a modern kitchen in complete to satisfy a mortgage company, or can I install my mini kitchen and update at a later date.

Mortgage banks won't lend without a kitchen (but it can be pretty minimal.)

2. I am assuming that any mortgage I get would need to have electrical updated and fixed. (brought up to code) Can I get a HELOC after paying cash, using HELOC money to bring it up to code?
Alone, no... but with the folks (assuming they qualify) you may be able to get a renovation loan.

3. As I understand it, Refurbish Mortgages will only pay a contractor to do the work on the house and will not allow you to do your own repairs. Would a refurbish mortgage be available for a listing that is "Cash only"
Yes... the lender doesn't give a fig about what they seller may or may not think they are trying to restrict or get away with. Money is money.

Helpful?
Dave Donhoff
Leverage Planner
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So... if you really wanted to, you could make an offer 'on a cash basis' and still completely ethically and morally apply for and get that cash from a mortgage lender, assuming you make the appropriate deadlines.

But, will most likely have to show proof of funds. Only the dumbest Realtor would allow his/her seller to sign papers without it for a cash sale. Also, if you say you are paying cash and then do not have the funds to follow through, be prepared to lose any good faith money you have put down.

2. What would be my closing costs on a CASH sale of this nature?
...
I'd SWAG it at around $500-$1,500 tops.


All depends. Each area has it's own expectations of transfer taxes and fees. Plus the seller will need to have taxes already paid be reimbursed. Your Realtor should be able to give you a very good estimate of closing costs BEFORE you submit a contract.

IP
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No. of Recommendations: 9
I really think you need to go get a job and find a room to rent at a house that will allow your dog. Since you are so handy, perhaps you can offer handyman service in lieu of some rent. Save your money, get established, then look to find what you are seeking, using YOUR money as a down payment and getting a mortgage in YOUR name.

Unless your folks are very well off, they may need THEIR money that you are hoping to use to make this work for their own care.
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First of all, let me say that without a job or any money of your own, in a new area, I think you are being foolish to attempt to purchase a fixer-upper with or without your parents' help.

If you were my child, I would rather just give you the money to buy the house for cash, or buy the house myself, without you on the mortgage or title, than co-sign for you, or borrow on my credit cards for you. If I, as your parent, could not afford to give you the cash to make the purchase, or to buy the house on my own, I would say 'Sorry, I am unable to help at this point.'

However, I did want to correct a misunderstanding that you have.....

3. As I understand it, Refurbish Mortgages will only pay a contractor to do the work on the house and will not allow you to do your own repairs.

That's not correct for all types of rehab mortgages. A federally guaranteed 203(k) mortgage allows borrowers who are 'qualified' to do their own work. The lender providing the loan could provide you guidelines on what 'qualifications' are needed for you to do the repairs, rather than having to hire a contractor.

From the HUD website FAQs on 203(k) loans: http://portal.hud.gov/hudportal/HUD?src=/program_offices/hou...

Is a contractor required to do the work?

No. However, if the borrower wants to do any work or be the general contractor, they must be qualified to do the work, and do it in a timely and workmanlike manner. It is very important that the work be done in a time frame that will assure the completion of the work that will be agreed upon in the Rehabilitation Loan Agreement (signed at closing). A borrower doing their own work can only be paid for the cost of the materials. Monies saved can be allocated to cost overruns or additional improvements.


The state or locality that you are buying the home in may also offer rehabilitation loans, for which different conditions may apply.

AJ
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for IP -

okay..it has no septic, I've been told it's city sewer. The only thing I can see that would make it a cash sale is the electrical update. I was going to send an inquiry to the selling agent to get more info. Also, I would be sure and have an inspection done. I don't suppose that can be done before making an offer. (that would be too good to be true.)

for Dave -

All the cash/credit card options are with 'rents income approval. I've already taken into account that I could not get a mortgage or HELOC without an income.

As for closing costs, I guess I need to be more specific. Is there a difference between Mortgage closing costs and CASH SALE closing costs? Anywhere I could find a potential list of these items?

According to Zillow the owner had originally listed the property at 43k back in 7/2012, RE agent first listed at 29K in jan 2013 and now it's down to 26999 as of May 2013. I was told by the agent that showed the property to me, (a buyer agent) that the owner had already turned down two offers of 15k and 20k. I had the thoughts of offering in the neighborhood of 22 to 24k. Depending on the closing costs. (less is better obviously)

The tax assessment is at 27K. Which although is not an appraisal value, gives me a ballpark figure to start with. I know for a fact that with less than a week of sweat equity and about 20 gallons of paint, I could bring the appraisal up. and that's just the cosmetic work. Lowe's card with 12 month no interest is also helpful. :) I'm a wiz at sweating copper pipe.

I realize how crazy this all sounds, and understand the potential pitfalls, but believe it _can_ be done.

IP - the property is in PA, Poconos area, so I was hoping to get your input on the PA market, and PA specific info. (Like..why is PA's school taxes so high???)
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Just to put you all at peace, I have no intention of taking advantage of my parents and will do everything short of selling my body to pay them back. (might even do that if I had to.)

My parents have to sell their house, and are procrastinating doing that because I am enabling them to stay here. I have other siblings in the area that need to pitch in and help my parents.

Right now the only way I can HELP my parents is to move and get a job. It's impossible for me to do that here, so I will need to move out. Getting a room in a house with a Border Collie who doesn't like strangers is NOT an option, and I can't leave the dog with my parents. This is a Border Collie, not a Chihuahua. He needs exercise everyday, and a place to run around. This house has a 1/2 acre lot. Not ideal, but big enough to get by. The payment on a 30 year loan at 10% is still less than it would cost me to rent a room or an apartment.

My brother came home last August and "borrowed" over 40k of my parents money. (My dad is starting to forget things, and my mother believes every thing my brother tells her.) He hasn't paid any of it back yet. I am not my brother. My parents gave me Power of Attorney because they trust me.

This house is not a large house, but big enough to be an investment and a home for me. If I have to save money by only heating the kitchen and bath I will do that. Hell, I will sleep on the floor. I am well conditioned to making sacrifices. I will eat pasta or ramen noodles every night if I have to, as long as I can make the payment to my parents. The payment on a 30 year loan at 10% is still less than it would cost me to rent a room or an apartment.

Now that you have my assurances on that.. can we get back to figuring out the best way to do this. Because it will get done...one way or another.
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IP - the property is in PA, Poconos area, so I was hoping to get your input on the PA market, and PA specific info. (Like..why is PA's school taxes so high???)

School taxes are so high in part because state income taxes are pretty low. Many schools receive very little state funding, and proceeds from lottery go to the elderly, not the schools. School taxes are typically due in Sept, so you will have a full year to pay on closing. It's a big state so the market will fluctuate with your location. Once you buy the place, you may be able to contest your school taxes based on sales price. Typically, the tax assessment is much lower than what the value of the house is, but I am not familiar with your specific area so YMMV. Has your Realtor shown you comps yet for the property? Prices are rising here in the Philly Burbs, but that is also where the jobs often are. PA can be one of the worst states for transfer tax, which is typically split between buyer and seller. This needs to be specified in your contract. The min is 2%, max I've seen somewhere around 5.5% of purchase price.

In the Poconos, you will need to be on the look out for fracking. If you have sewer, sounds as though you are not too rural, so this may be a minor concern. PA has very strong seller disclosure laws, requiring sellers to tell all or get sued later. Get a copy now, before deciding to put an offer in. Realtor should be able to get you a paper with all your anticipated closing costs. Ask for it if you are serious. Google the address to make sure there is nothing planned for the area, and go to or call the township offices to ask if there is anything you should know about that area or even that specific house. They should have a file of improvements made that got permits. No permits is sadly not unusual.

Even without a mortgage, GET TITLE INSURANCE!!!

Happy to field any other questions, details will help.

IP
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Ianna,

Given your parents have decent funds, talk to them about borrowing the money and paying them the interest. $30,000 at 5% interest, interest only payments might be attractive to them, depending on what their money is making. Since you have POA I would make sure to write it up, though. That's how I bought my first house, going right to Dad with the papers for his consideration. The paperwork, something simple typed up, impressed him with my seriousness. When it is paid, have them sign "paid" with the date, and give you back the papers.

Try getting the loan from the seller first though. It's better to make him carry the risk than your parents. Realize that even the best intentions to repay can be torpedoed by the unexpected. The low cost of the house has me concerned. What is the average sales price in that area? If there was a good economy there, prices would probably be higher. How confident are you of employment potential???

Your situation sounds as though it requires thinking outside the box. Even if you had income and stellar credit a small loan like this would be at a higher rate and lending institutions don't want to be bothered with it.

Border Collie is almost impossible without a yard. What an active creature!

IP
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Just to put you all at peace,...

Everyone is just trying to make sure you have covered all the bases. We don't know your background, and what your experience is, so our comments make get a bit more far reaching than necessary. Don't take it personally.

IP
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House is in Weatherly, in Carbon County. I've an accounting degree with experience, so getting a job, even through a temp agency should be no problem. (I also have a residential construction degree.) I've already done a few searches on the PA job site. (forgotten the exact name, I have it bookmarked.) I have a car and can drive up to an hour away, but would prefer to keep it under 1/2 hour. Which is possible in the area.

My parents are originally from PA. My grandmother recently moved to Ambler from Wilkes-Barre. She's 99 now. She was 95 (93?) or so when my uncle moved her into an assisted living home. My dad will be 85 this month and my mother is 79.

My eldest brother who normally would be taking care of all of this died unexpectedly in a skiing accident a few years ago. He was 56(?). I'm the youngest of 5.

I'm in no way expecting my family situation to get better. I'm just facing the fact that I need to get back to work.

Hope this helps to clear up some stuff. As I said I've been thinking seriously about this for over a year. (In fact was talking to my oldest brother about it a month or so before he died.)

It's time to get my ducts (sic) in a row and move forward.
(sorry couldn't resist the pun) Lol!

Ianna
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Given your parents have decent funds, talk to them about borrowing the money and paying them the interest. $30,000 at 5% interest, interest only payments might be attractive to them, depending on what their money is making.

Uh.. don't know about decent funds. Dad's living on pension and SSI. Mom on SSI and a $500 payment from dad. The are not divorced, and have no cash savings. They are both living in the same house but mom wont be in the same room with dad.

My brother borrowed money off the HELOC to fix up a house he owns here in NYS that he's got my mothers name on... HE lives in NC. My dad asked me a couple weeks ago why the HELOC payment kept going up. I told him it was because he kept writing my brother checks. He didn't remember doing it he says.

Lord, I didn't wanna get into all of this... gist of the story is, My brother charged up the Lowes card, then borrowed money from my dad's equity to pay it off, then talked my dad into another 8K personal loan, then talked him into getting a credit card that my brother had signature rights on, which he maxed out 6k in less than a month. The idea was he was going to pay my dad back with the money he got from the rent on the house. But the tenant he got lived there 3 months, never paid her rent in full, the daughters boyfriend was shot and there's a grand jury pending, and the son did damage to the house. Tenant has left, left a bunch of crap in the house, moved to florida. My brother wants more money to re-fix the house. (I told him in no uncertain terms NO! NO! NO!) He keeps borrowing money from mom so she cant pay her bills, and they owe 6 years of back taxes on his house. (btw..I'm a bi*c* because I wont give him any money and keep telling my parents to not give him any money..) He doesn't have a job. (claims he's a contractor) (and I'm the queen of Narnia!!) Can't pay his own rent on his house in NC where he lives with his drug addict gf. (she's on methadone recovery.) (no comment there.) He trades penny stocks on Scottrade thinking everyday he's going to make a bunch of money. (he "borrowed" money from my mother to start the trading)


uh..do I need to go on?

I guess my point is. My parents don't have the funds to "loan" me 30K. We would have to get a mortgage to pay off the PA house at some point. A HELOC maybe. The cash from credit cards thing was just to obtain the title on the house, and then obtain a re-finance or HELOC.

sorry about the rant..
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3rd St? I think you can do better. Go to Zillow and start exploring. The town is clearly in economic crisis, with several low priced listings and a roughly equal number of pre-foreclosures. For example, I found this listing: http://www.zillow.com/homedetails/49-Wilbur-St-Weatherly-PA-... Though it is listed for about %50K, what is interesting is that it sold on April 2013 for $7,500. Find out how. There may be a ton of wiggle room in those numbers, and it helps it has a kitchen. A quick $20K profit may be very interesting to these sellers who are flipping. Ditto for this one: http://www.zillow.com/homedetails/433-3rd-St-Weatherly-PA-18....

How comfortable is your agent with foreclosures? It might be a good option for you, though there will be no disclosure involved.

IP
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Yeah, no details necessary. Sorry, I thought you had mentioned your parents were OK financially.

Sounds as though you really need to get that job first. Would be wise anyway. There are a lot of very qualified people who were unable to get jobs who would have gotten them easily in the past. I fear that your absence from the work force, your gap in your resume will wind up hurting your chances.

I think your only prayer of buying will be 100% seller financing. Even then, you'll need some cash.

Best of luck,

IP
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How comfortable is your agent with foreclosures?

I don't have an agent. I spoke with an agent when I went camping in June, but have no contract with him. He actually asked me if I wanted to work in his office. As an agent or assistant. Contingent on my getting RE license though. Also thought I should become a notary.

The second house you listed I saw on Realtor.com. It's a Hud home. Thought it might be interesting for my mother. They were taking bids though. Don't have the info yet to do that. Also, it's more money.

I have checked out this house and it has everything I require. It is in a price range I can afford, has the space and yard I need. It also has an ally in the back that will allow me to put in a drive and possibly a workshop building in the back. I didn't pick this house on a whim. I've done a lot of research.

and this thread has gotten totally off the track of where it started:
Which is what financing do I need to obtain it?

Need some sleep.. continue tomorrow.
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My parents don't have the funds to "loan" me 30K. We would have to get a mortgage to pay off the PA house at some point.

With the circumstances you describe (Dad on pension and SSI, no savings, credit cards that are maxed out, a $500/month payment to Mom and a HELOC with a payment that's getting larger and sounds like it's getting close to being maxed), I would wonder if your Dad would even qualify for another mortgage at this point, even for only $30k.

The cash from credit cards thing was just to obtain the title on the house, and then obtain a re-finance or HELOC.

That's a very dangerous way to go, because if he/you can't get a mortgage or a HELOC for the full amount owed, Dad/you will be stuck with the (probably larger) credit card payments. I would strongly suggest that someone get a mortgage for the initial purchase, rather than assuming that you will be able to refinance cards after the purchase.

If you follow ip's advice to look at foreclosures, you may be able to get a HUD Homepath rehab mortgage.

AJ
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From the house you are looking at:

"Here is a true fixer upper! 4 bedrooms, 1 bath located in the town of Weatherly, nice quiet street. Needs a lot of work! Seller says bring me an offer! Perfect for Investors! Home is being sold ''AS IS''"

It doesn't have a kitchen, just empty, ripped up walls. I don't understand how you will be able to pay to fix it up while paying for the mortgage, taxes, utilities, etc. Not to mention basic living expenses, vet pills, dog food, etc. You say you can't afford rent, so how can you afford to buy a house??

We aren't here to squash your dream, we are here to help, guide and sometimes question why (or how). Seriously, I don't want to see you take out some loan, start charging up a credit card, and end up in serious debt with a house you can't afford or sell, making you worse off. I still think with your skills you can find someone with a fixer upper that you could work out a rent to own type deal with. You fix it up in lieu of rent, then once you have a regular job you can start paying some money towards a downpayment, having the owner carry back the mortgage.
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Vet bills, not pills sorry.

From your original post:

Having stated those goals - I would need the following:
A. Help from my parents to obtain mortgage or cash funds. Being very intimate with their finances, this is very possible.


After reading what you wrote about your parents living on SSI and your brother already dipping into their HELOC, I don't see how this is "very possible". Like I said, please don't put your folks in a situation where they can't pay the HELOC your brother helped himself to!
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I don't have an agent. I spoke with an agent when I went camping in June, but have no contract with him. He actually asked me if I wanted to work in his office. As an agent or assistant. Contingent on my getting RE license though. Also thought I should become a notary.

Your best bet is to get an agent, one who has knowledge of this kind of low price transaction that requires fixing up. It will be a challenge given the Realtor will get basically nothing from selling this high challenge property which will require much effort on their part, and you are not likely to be an investor who will buy multiple properties.

I also suggest you go back and reread this whole thread. You have made no comments re the seller financing I suggested, though I really expect it to be your best option. It won't always be offered, and in fact none of the ones I got were offered. I asked. These are best options when financing will be tough to get, (and you won't get one without a kitchen,) and the property has marketing challenges such as being an extreme fixer upper and having decent alternative competition.

IP
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It doesn't have a kitchen, just empty, ripped up walls. I don't understand how you will be able to pay to fix it up while paying for the mortgage, taxes, utilities, etc. Not to mention basic living expenses, vet pills, dog food, etc. You say you can't afford rent, so how can you afford to buy a house??

The pictures on the site are blurry and don't show the whole story.

I have been _in_ the house. The walls are plaster and solid. (I pounded on them) There is a paper covering which has been painted and is peeling. This paper can be stripped off and walls painted. The kitchen has no appliances or cupboards. I can supply a entire kitchen without even going to the store. (short an oven - though I have a coal/propane antique Kalamazoo kitchen stove that has an oven & 4 gas burners.) YOU have a very different idea of what's needed in a kitchen than I do. There are many people who have a full high end kitchen with stainless steel appliances and expensive cabinets and end up eating take out every night.

The kitchen has real wood wainscoting, which can be stripped, sanded and painted. The walls are solid. If you moved into a house in Europe there is no kitchen on a brand new house! You are using very narrow thinking.


The payment on this house with a mortgage of 30 years at 10% (that's TEN PERCENT) including the taxes and insurance and property insurance would be @ $500.00. That is cheaper than paying rent and utilities.

I see no point in spending the money on rent and throwing it out the window when I can spend it on a house that can be improved.
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YOU have a very different idea of what's needed in a kitchen than I do.

It really doesn't matter what you or I believe is needed in a kitchen...it matters what the lending industry requires, assuming you are still looking at getting it funded that way at some point in time. If you don't want conventional lending, it will be less of an issue.

IP
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With the circumstances you describe (Dad on pension and SSI, no savings, credit cards that are maxed out, a $500/month payment to Mom and a HELOC with a payment that's getting larger and sounds like it's getting close to being maxed), I would wonder if your Dad would even qualify for another mortgage at this point, even for only $30k.


Dad's cards are not maxed out. The card that he gave my brother is maxed out. It would not be ANOTHER mortgage. He does not have a mortgage.
He is living on his pension and social security because he is 85 and retired. He had a savings account he just used to put a down payment on a new used car. (2013 off lease Nissan with full warrenty coverage for the life of the loan.)

He is not poor. He's not rich. He is middle class.
His HELOC he pays $150 above and beyond the payment every month.
His health insurance payment for the year just got cut in half.

The point is that he will not be paying for this house. _I_ will be paying for this house. He will only be providing the credit. I will also most likely be paying extra on each payment.

I have no intention of putting this all on a credit card if there is no chance of getting a HELOC or Mortgage with in a few months.

I'm crazy..not stupid.

I have not looked into the owner financing yet, because I would prefer to work with someone I know than rely on someone I do not know. I know that if you find someone that is willing to hold the mortgage, you can get a good deal. BUT that person needs to trust you. Right now I have nothing to put forward. If I had a job and was currently working in the area then I'd have something to work with. It's a plan that's on the back burner.
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Dad's cards are not maxed out. The card that he gave my brother is maxed out.

From a credit scoring perspective, even 1 maxed out card can have an impact on your score.

It would not be ANOTHER mortgage. He does not have a mortgage.

He has a HELOC. A HELOC is a mortgage (a lien against real property that is secured by a note and/or deed of trust). Therefore it would be ANOTHER mortgage.

The point is that he will not be paying for this house. _I_ will be paying for this house. He will only be providing the credit. I will also most likely be paying extra on each payment.

By providing credit through co-signing, he can be held legally responsible to pay for the mortgage, even if you are also on the mortgage. By borrowing on his credit card, from a legal standpoint, he would be solely responsible for paying for the debt.

If you were to get hit by a bus the day after you closed, he would end up having to pay off the debt.

Stuff happens.

I have no intention of putting this all on a credit card if there is no chance of getting a HELOC or Mortgage with in a few months.

I'm crazy..not stupid.


Then I would strongly suggest that you look for a rehab mortgage that you can qualify for, instead of trying to mickey-mouse around with your Dad's credit cards. If they were your credit cards, I would still strongly advise that a rehab loan should be looked into, but it would only be your credit and your legal obligations you were messing with. But having your Dad take high-rate cash advances on his cards to buy a house for someone who is currently unemployed, has no solid job prospects and has a not so wonderful credit score so that they can hopefully get a cash-out mortgage in a few months? And if they can't do a cash-out mortgage, he's going to have to sign up for one so that he can get the high rate debt paid off? Sorry, that's beyond crazy for him to do - that approaches stupid, from his standpoint.

And for you to do this, when he's already expressed to you that he doesn't remember writing HELOC checks to your brother (that you know he wrote)? I'd be worried about getting charged with elder abuse, if I were you. I know it's not your intention, I know that he agrees to it, and you feel that he is lucid when he gives you that agreement. However, prosecutors tend to put the worst spin on things.

Right now I have nothing to put forward. If I had a job and was currently working in the area then I'd have something to work with. It's a plan that's on the back burner.

Which is why you need to find some type of alternate living arrangement for a few months before you purchase. Because at this point, without a job, nobody but your father is going to give you money. And given what I've outlined above, if you go forward with that idea, you are putting a lot of risk on both him and yourself, IMO.

AJ
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I just stumbled on this thread. I don't mean to offend, and I don't mean to be harsh because you seem like a nice person, but I have seen similar situations play out in my own family over the years and I can say that to me this just has recipe for disaster written all over it...

- You have no income/job
- You have no experience for last 5-7 years

- You want to buy a 130 year old house, with no kitchen, in need of major other work and being sold as "cash only" for relatively low price
- You want to finance this purchase with ~$30K from your father's credit cards and/or a HELOC on their home

- Your elderly parents are living on fixed incomes
- Their house is the bulk of their assets, and already has a HELOC (mortgage) on it now, and your father does not recall/understand how it was run up to the point it is...

- You state that they need to sell their house, but they aren't because...
- ...you are enabling them to stay in their home...
- ...you also allude to the fact that they need full time care because you say that's why you can't get yourself a job now

So what happens when you go away?

Presumably their house is sold right? So do they go into assisted living / nursing home?

How will loaning you this $30K affect their ability to make this transition? I know that assets, and recent (6 months?) changes in assets, are looked at closely when you are trying to get government aid for elderly care--so having this large amount of money go to your place could be an issue. Also, if your Dad is the owner of this house that is an asset the government will consider. If you are the owner then that means you received a cash gift from him/them to buy it (IRS/tax implication here... isn't the limit $11K/yr per parent per child? So $22K for you?)


As if this wasn't already complicated enough...

- You have (3) other siblings...
- One sibling is already tapping The Bank of Dad and looking for more, but you are refusing him and you have PoA.

Have you talked to your other siblings about this ~$30K you want your parents to front to buy you a house elsewhere? Have you talked to them about what happens to your parents after you leave?


Frankly, you're focused on the minutiae of buying this house when you should be finding yourself a job now and stepping out of the role of day to day care provider for your parents...
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You want to finance this purchase with ~$30K from your father's credit cards and/or a HELOC on their home

The HELOC would be on the new home, not on their home. And it's not 30K ...

Presumably their house is sold right? So do they go into assisted living / nursing home?
How will loaning you this $30K affect their ability to make this transition? I know that assets, and recent (6 months?) changes in assets, are looked at closely when you are trying to get government aid for elderly care--so having this large amount of money go to your place could be an issue.


They are not eligible for gov. aid because my dad has too much income. (pension and social security. explain that one to me, cause I don't get it) I've already looked in to this some.
It's not likely they are going to sell their house and move in the next 6 months.. It would take at least a year for them to clean out and sell. My mother would probably up and run immediately. (she doesn't like my dad.) On top of that my mother owns half of my brother's house. So that's already gonna affect the financials.




Every single point you people have brought up I have gone over, and over, and over again..for more than 2 years.

and yes I've talked to my other siblings about this.

My parents would need to face reality and do something different, instead of relying on me to do everything.

and yes..at this point I'm focused on buying the house, because I've already gone through all the rest of it.



I'm going to end this thread until I have additional information from the selling realtor.

And might I add, the only person that answered any of the questions from my original post was Dave. (Thank you, Dave.)
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Is there work in the field you want to work in in the current area where you live, that you could do if you didn't feel you had to care for your parents full-time?

Because another option could be either your parents and siblings pay you for the in-home care you're providing (since this has enabled your parents to age-in-place and your siblings not to feel they have to help), or you get a job in your area, start paying your parents some rent with that money, and then they pay for some in-home care with that money. And then all siblings living in the area, including you, split up helping out your parents on days when they don't have in-home care, or the occational "favors" that may come up - since you didn't make it sound like your parents needed round-the-clock care.

It seems to me, if you could get work in your current area, that would be the best option on getting yourself established and start re-building a life where you can support yourself down the road --- while also having a roof over your head for yourself and your dog without having to go into debt for it before you're sure of a stable income.
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Sounds good, except for what's stated in 1st post:

getting a job while living here is not an option. Parents are too distracting, and would be calling me at work all day. IE: cant work 2 full time jobs at the same time.
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getting a job while living here is not an option. Parents are too distracting, and would be calling me at work all day. IE: cant work 2 full time jobs at the same time.

Maybe that's if they don't think there's anyone else to help them - might not be the case if they're hiring in-home care and if other sibs are pitching in.

Plus, how does a family member call-someone-at-work-all day? Don't give your work number out, and if you have a cellphone, turn it off during the workday.
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...how does a family member call-someone-at-work-all day? Don't give your work number out, and if you have a cellphone, turn it off during the workday...

Yep, there's that. If your (generic) cell phone is on, or if people who shouldn't have your work number have your work number, then it doesn't much matter if your job is in the same town or 2000 miles away.
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LadyIanna, I bet you're sorry you asked.
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CCinOC wrote: LadyIanna, I bet you're sorry you asked.


Yeah, cause you have never injected unwanted advise in any thread.....really Catherine?
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I was talking about the ganging up on this poor poster, who had no idea she was walking into a den of jackals.
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LadyIanna, I bet you're sorry you asked.


I did kinda feel like an over cooked panini. :^D


Or that George Foreman ran the board....


----------------------------------------
btw - sent an email to the selling broker on that property, and got an extremely vague answer. Replied asking for more information, and no response. Just sent another email today, asking for additional information. Doubt I'll hear back.

Found another property in the area: a Two 2 bedroom Double (Duplex) for $55,000. Move in ready, no fixing required. Might be a better option in the long run.


Medical conditions have been holding me up on doing more research. My Dr diagnosed me with Bronchitis and Asthma. (probably environmentally related.) I'm doing better now. I don't sound like an accordion anymore. :-)

Lady I, still swimming up-hill.
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just an update - I got a response from the selling broker about the first house:

Hello,

The information that I previously had sent you is all the information I have at this time. I understand that you are not local however, with interest in a home such as this one, the best way to determine if this home is for you is to come view it and inspect to see if it is a project you are willing to take on. The seller purchased this home at a state Tax sale and does not know any of the history of the property and only knows what he sees. Which the information I already forwarded on to you.



Which is pretty useless to me, but what I expected. Only new info I got was that it was bought at a tax sale. Maybe I can backtrack and get a bit more information there. I wonder if they have any deed info available online like they do in my county.


Can you have an inspection done on a house before you make an offer???
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Can you have an inspection done on a house before you make an offer???

Sure, but there is no guarantee that they will then accept an offer you are happy with, and you risk flushing away the money you spent on your inspection. However, you can modify your offer after the inspection if your offer is phrased properly. It's pretty typical, but it's is also an option that can be waived, so make sure you don't waive it.

IP
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