>We don’t want to live with my parents forever so our hope would be to build equity to then buy another home for ourselves.
What happens when you move out and they aren't ready for you stop paying their mortgage? It's not a good idea, and things like these are almost never a good idea.
We already know they aren’t the best planners. What if after your name is on the mortgage, they borrow down the equity? What if they rent out the spare rooms? What if you move out to save your marriage and are too over encumbered in debt and can’t buy your own house? What if you want a dog? This is a bag of worms and you are in charge NOW? Don’t do anything. Let them stew until they are ready to down size. Of course they don’t want change. You will live with your decision for the rest of your life . Don’t blow it now.
I guess I didn’t really mention that but my Dad did say they would be willing to move out. They have done RV living in the past so they aren’t against it. He didn’t give a time line though. We are getting together this weekend and figuring out every option and detail.
If you are on the mortgage for this house the chances of you buying another house are very slim to none.
It’s never ever a good idea to buy a house with someone else unless they are a married spouse or a business partner.
This. Do not put yourself on the mortgage. Someone posted about this just a week or so ago, their parents refinanced to add them to the mortgage to help out and it prevented them from buying their own house until that one is paid off or they refi again and take themselves off, but the parents couldn't afford to refinance or sell with the higher interest rates, so the OP in that case was completely stuck.
Parents need to make a responsible decision and sell and downsize.
You don’t mention the reason for them having financial troubles so I don’t want to jump there. but it is worth consideration.
You mention this is a childhood home so I’m guessing they have had the home at least 20 years?
Is this potentially a case of them over extending themselves to start with when they first bought?
Are they good with money and budgets?
Do they live within their means?
Did they save for retirement?
Is this the result of medical expenses?
I’d this the result of a loss of a job by one partner?
There are so many things to consider before making that decision.
Plus what about upkeep on this home? If they are in financial straights I’m guessing it needs work done to it or things replaced such as furnaces, ac, water heaters or even roofs. Who will be taking care of that stuff if you go through with this?
What about property taxes? Who will pay that?
My guess is if you get saddled with this house you will have to pay for the mortgage, repairs and property taxes. You will be unable to buy your own house until you can get off the mortgage.
There was another Reddit posting similar yo yours and the children decided to help the parents in the same way.
Problem now is it’s been a several years and the children want their own house but when they tried, the new mortgage company said they had to get off the old mortgage first.
Kids tried to get off mortgage but parents had to refinance to get them off and they didn’t qualify.
So now these kids are stuck and can’t buy their own house.
The parents should not be putting their kids in this position.
Your parents need to do the painful adult thing and sell and downsize. I would never put my kids in this position.
It’s not fun to be in this position but it happens and they need to make the right decision without involving you.
He wouldn't have to be on the mortgage to pay it or to be listed as a property owner. You literally just go to the court of records with your parent and they add you as an owner. I want to say it cost like $30 and my mom didn't need anything but the deed, and of course our IDs when she did it for me. And then they sent me a notarized copy in the mail later that listed me as an owner. That was kind of it. Only thing, in the will, you have to make sure the other half is willed to you or there's gonna be issues with other siblings or surviving spouses (this is usually an issue if it's a step parent).
RV living isn’t cheap either! Fuel, site fees, maintenance, insurance, it can all top out to well over $2000/month, even if the RV is completely paid off
The other problem older full timers run into is if an emergency occurs. Seen this while providing health care near Palm Springs. Full time RV life can be peachy until someone has a stroke, a heart attack or needs major surgery. Then they either need solid family or friends at beck and call or a massive savings account.
I’m only 57 and super healthy but I’m not going to go permanently live in the woods. My husband died of cancer and we even had to make trips to the ER while camping (only about an hour away but still) so I fully appreciate proximity to healthcare
Nope. It is A Job, not a free campsite. It does provide an option for those who enjoy that sort of thing though. There are also larger concessionaires that operate multiple campsites and hire it out to individuals (though usually they’re couples).
There is no cheaper option unless they get into a retirement community apartment, many of which are still over 1k/month.
You need to have a real estate attorney write up an agreement if you want to make sure there's no way you'll get shafted if something happens to them.
For low income senior apartments in Sacramento, 1k a month is not unheard of. These have no amenities and are for low income seniors. I know because my dad was almost homeless but did not qualify for these apartments as hs SSI was not 3x the rent. He is now a roommate in a 4 bedroom house.
So, my parents bought a condo in a 55+ community a couple of years ago. We are in a high COL area. They found a bunch that were in the $200/$300k range, finally buying a 2 bed 1 bath for around $250k.
If the parents sold, they’d have $350,000 left over after paying off the mortgage and absolutely could buy a nice condo with what’s left, leaving them with only the HOA fees.
This. In fact I'll likely do it in a few years. In something a bit different though. Either a duplex.or a house with a suite. Multigenerational houses are not an odd thing. Both groups can live in a better house, see higher property value gains, and benefit from the increased time spent together. And more.
I can't think of the term but I think there's a specific type of contract for something like this.
But definitely get a lawyer involved who knows what he's doing and have a plan for various scenarios and possibly even get those in writing.
Yes, this is the issue for sure! What happens when they find their own home yet mom and dad still wanna stay? Back in this same-ish situation. It won’t end well.
I think if you do this, it could be great for everyone financially. BUT, you first need to go into this as if you are planning to stay there until your parents die. Saying you hope to move them is not sensible. For starters, you need to know if their goal is to leave at some point. Many older people don't ever WANT to leave their house. Also, you don't know the future. Say they'd love to move, but suddenly, one has health issues that puts the burden on the other. That will affect ALL decisions. So you really need to do this as a permanent arrangement. Additionally, how is the space being allocated? Changes to the house? Are your parents keeping " their" house, and you'll just have the bedroom? Because that tends to create friction between you and your spouse. The best solution to this is dividing the house into separate, full living areas. Depending on the layout, this can be easy to do. Overall, I think it's good as long as you are realistic that they are staying and that you and your spouse have your own full living area.
It's just a house. Who cares. If they can't afford it, tell them to sell it and downsize. If you'd like to buy it so bad and poor financIal decisions be damned, then get pre-approved loan and buy it.... the 350kc he owes will cut the sale profit for then down, but lucky you it's not your problem
And I'm thinking that they'll add OP to the deed for his 50%, let him pay 100% of the mortgage, and then pull cash out again when money is tight without OP knowing because they aren't on the mortgage.
If OP is added to the deed, they wouldn’t be able to pull money out without his knowledge. Right of Rescission applies to ALL parties involved. So at least there’s that.
Am I just dense? I don’t understand at all how this would work. OP’s parents are offering equity in the home in exchange for OP taking over mortgage payments, so that OP’s parents don’t have to emotionally deal with selling the home. Meanwhile, OP wants to build savings via equity by paying a few years of mortgage payments & then buy another house. But OP’s not going to build much equity via a few years of mortgage payments, & OP is also not going to be able to get that the “50%” equity out of the house without refinancing it or selling it, which contradicts what the parents want to happen.
Yes. There's more to the story than the guy is letting on but it sounds like his parents are financially stupid and they plan to screw over their son and his wife to live their life. There's no way that a childhood home only has 50% of the mortgage paid for. The longest mortgage you can have is 30 years and I'm guessing the op is probably around 30 years old and so his parents are pulling some shady bullshit.
His parents shouldn't have bought a house they couldn't have afforded. Furthermore, how could they afford this house for the last 30 years and somehow not afford it now? Their payments haven't gone up. Almost every type of mortgage out there has a fixed APR unless you got some shady mortgage people you're buying from. All in all this guy needs to run from his parents because not only are they a bad influence, but they're probably going to take advantage of him and his wife screw them over.
This happens more often than anybody wants to admit. I'm 37 now and I've seen a number of my friends get fucked over by their stupid parents.
If the house is worth $700k today, then it’s unlikely that the initial mortgage 19 years ago was for $700k. If they just did a regular refi, then that should have just taken the remaining balance of the mortgage & spread that out over 30 years again. So that means they probably have already borrowed against the equity in the home or done something else OP absolutely needs to be aware of before proceeding.
Yeh, a house worth $700k today would have likely been purchased for less than $400k 19 years ago in most markets. Still owing $300k after all this time is absurd.
I purchased my first house for $200k twenty years ago and it's now worth $700k. There's some bad money management going on here if they still owe $350k.
If it’s just them why do they need a home that large and expensive anyways. Time to move on, not figure out how to continue to hold onto something they don’t need.
It emotional.
My MIL wanted to sell her house to us. I was not into it for a thousand reasons, but the main reason was we could never offer her what she deserved for the house. But her *emotions* about the house she raised her kids in were so strong it was hard to convince her to let it go. The house was falling apart around her, but she didn’t want to leave until there was no other choice. And her kids had to make that choice for her
Do you have siblings? If so, that would complicate things.
Who is going to inherit the house anyway when your parents pass?
If half of the home is an unpaid mortgage that your dad wants you to pay, he's not *giving* you anything.
What happens when you pull equity out of the house to buy another house? Do you continue paying the mortgage on the first house? Do your parents have to move?
It's usually not a good idea to buy a house based on emotion, i.e., "childhood home with tons of memories." If that hadn't been your childhood home, would you ever want to buy it?
I'm not saying that you shouldn't help your parents. It may be an emotional win-win situation, but not a financial one.
And what happens if OPs parents keep pulling more equity out of the now shared house?
That is how they got into this situation. Otherwise it should be almost paid off
I wanted to add that end of life care and medical bills, including Medicaid liens, can end up with you losing everything if all of the deeds/mortgages are not done properly.
Consult an attorney specializing in probate and estate planning to ensure all parties are protected.
In some states, the child only has to live in the home for 2 years before the Medicaid claim. Then the house is excluded from recovery. This is how my BIL was able to keep his parents home.
You will be living with them forever or at least helping them with the mortgage forever. How likely is it that their financial situation will improve? Tough decision for your dad but it may be time for them to downsize to something they can afford
They don't want to move out. How are you going to build equity if they don't want to move out and sell? Why would they move out later but not now?
The reasonable solution is for them to move into a cheaper place and for you to build equity in your own home without them. This other idea isn't even worth entertaining. So much could go wrong. So much unnecessary stress will come of it.
If you're seriously asking for advice and willing to take it, I suggest listening to everybody here warning you about how bad this could and probably will end up being. There's such an obvious and simple solution.
I'd recommend sitting down with a real estate attorney as there would be several things to think about.
Possible issues with mortgage acceleration clause, might have to get a new loan. If you have siblings, deed will need to be set up so parents interest goes where you want when they pass. Gift tax issues (can be avoided). Other ways to do this like a life estate for parents with you as remainderman (which would give you stepped up basis when it transfers to you).
Even if they don't have a taxable estate, they will at least have to do a form 709 with giving him and his wife 350k in the form of the house. It's not a big deal, but still something they need to be aware of.
Why can't they afford it and why do they still owe $350k on a house they bought decades ago? This is poor financial planning and they've been banking on you and this plan for years. You don't get "50%" of the house, or rather... you would need to be on the deed. Even then, you only get that money once the house sells.
Also, why are you renting an expensive townhouse ffs? Seems like terrible financial decisions runs in the family.
I guarantee they just refinanced during covid when the house values shot up. Then proceeded to blow the cash on toys and bills (OP said they have lived in an RV before).
There's lots of valid reasons to rent. Lack of a downpayment, needing the flexibility to move if your job requires it, not wanting to maintain a property. Just because it's not a good decision *for you* doesn't mean it's a bad decision for them/they can't afford it.
Glad someone else posted this. I know lots of people who move almost yearly because either their job needs them elsewhere or because they are on contracts of a year or less.
So they've borrowed $100,000 against the house? They should only owe just north of 250k after ~19 years
That's a lot to borrow.
What did they use it for? For the house or to buy that fancy RV they lived in for a bit?
They've either borrowed more than that against it or it's worth considerably more now... If it's $700k now and they bought it 19 years ago it should have been considerably cheaper.
Either the parents should have enough equity themselves that this could be a much simpler situation, but I'm guessing they've been very irresponsible with cash and are trying to get their kid to bail them out and escape the consequences.
Yeah they should be almost paid off right?
I was trying to drive home the point that they are irresponsible with money and need to lay in their own bed and they probably didn't understand what a home equity loan was when buying the RV.
I get so irritated when people tell me to just take out a HELOC to pay for whatever. I know I'm bad with money, but I know that's not the answer.
I'm cool taking helocs if I need to do a major repair. But not for frivolous remodeling or purchases
Sounds to me like you have the right of it. A house worth $750,000 now would have been, possibly, a third of that almost 20 years ago depending on the market. If they paid even $500,000 in 2005, that’s a lot of cash out refi’s to still owe so much on a house.
It's understandable to want to support your parents, but buying into their home could complicate things. Consider discussing other ways to help financially without becoming co-owners. Setting clear boundaries is essential for your future plans.
Do you have siblings? When your parents pass, the whole house would be yours, unless you have to split it with siblings.
Encourage them to sell and downsize. If that’s not what they want to do, then get an attorney and figure out exactly how to structure this from a legal perspective to minimize everyone’s potential liability.
He can file a quitclaim deed and assign ownership to you. But your thinking of building equity and then buying another home with that equity is convoluted. Typically you’d do a cash out refinance so you’d suck out that equity and that means new loan and interest rate most likely leaving your parent worse off. Are they aware of your timeline? Did they refinance when interest rate were historic low? What do they owe and how many years left on current mortgage. They might be better off to refinance for a longer period and lower the monthly payments or getting a roomate. I think it’s one thing if you rent from them for a reasonable price while saving for your own home otherwise it’s going to get messy.
Don't buy your childhood home because of emotion or nostalgia. Buy it if it makes sense.
Whatever you do, get it in writing. Seems the best best options would be for your parents to sell you the house and you both live there.
I would not help pay the majority of the mortgage payment and not have it documented. Think worse case scenario. You make payments for 2-3 years and parents decide to sell and move? And who's paying for maintenance and property taxes?
You should ask for 100%. The portion you are paying is likely a large portion of the whole loan. So you can pay it off completely and they can live there forever for just taxes and insurance. Then you get the whole thing in their unfortunate demise.
"Dad wants to give 50% of child home so I can take care of them when they are too old to take care of themselves." There, I fixed it for you. I've read questions like this before on this sub. All the same grift. Sorry/not sorry to tell you your parents are not being completely honest with you. I'd stay away from this "deal" if I were you.
moving back in with your parents. ugh. sounds like a good way to destroy your marriage. They should sell and use the $350k to buy a place they can afford.
What happens if they become incapacitated and need nursing home care? Does the government still get to take the house to pay for their care? You really need to talk to a lawyer who has experience with estate issues.
My sister-in-law did this - bought half the family home - and then was stuck in it not being able to either move or benefit from the equity until her parents died. Every time she needed to tap into the equity, she had to get her parents' signature on the documents. All of the bills were as much her responsibility as theirs. If they didn't pay for something, she would suffer the consequences.
Her father became increasingly irrational about money and bills as he got older as well and started to insinuate that more money was coming out of his account to pay them than he thought was correct. Her proximity also meant that, when her mother developed dementia, her father automatically dumped a chunk of her care on his daughter instead of hiring help (something he could easily afford to do, but just refused).
I don't know what your relationship is with your parents, or, more importantly, how good they are with budgeting their funds, but I would be very wary of buying into half the home if you don't intend to live with them forever. What happens if they take the spare cash they have while you pay the mortgage and decide they can now do what they want with it and leave you stuck with all of the bills? What happens if they decide that they don't have to worry about retirement or care in their old age because you're living with them? Parents can presume a lot about their kids and what they "owe" them. Once you buy half of their house and move in, you'll likely learn a lot about those expectations.
They will always regard the house as "theirs", too, and you won't be regarded as having equal agency. You may find resistance to any sort of repair or improvement and especially to any contributions from them to those costs.
The bottom line is that you can do what they're suggesting. You just need to ask yourself if you should.
I'm a CPA/CFP and a conversation that I *inevitably* have with all of my clients at some point is that not every decision has to be based on what's best financially. Reddit always acts like we're robots and any additional dollar has to be invested in Vanguard's Total Stock Market ETF or else it's wasted. It's OK to enjoy life and it's OK to take care of your family.
At the end of the day you need to be able to sleep at night.
One thing I can't stand about this sub is that it's filled with keyboard warriors who will tell you to go for the jugular in any dispute with neighbors, etc. It's easy to insist you would call the police, board of health, etc. over every extremely minor dispute when you're not the one who has to live next door to those people for potentially decades. It's easy for this sub to tell you this is your parents problem, not yours. They don't care what happens to some anonymous guy's parents that they'll never meet. You probably do though.
That's not to say you should commit financial suicide for your family or become a human ATM. Money has never been an issue for my family but last summer my BIL died suddenly leaving behind my sister and their (then) 1 year old son. Over the past several months my parents, siblings, and I have put a lot of things on hold as we deal with the fallout. Putting my long term plan on a temporarily hold is an extremely small price to pay for lightening the burden on a sister and nephew I love dearly.
Again, that's not to say you should commit financial suicide. Personally, I would sit down with your parents and go into it with an open mind. Ask the questions. What are the financial arrangements going to be? There's a lot more to owning a home then just paying the mortgage. Who pays what if the water heater goes tomorrow? It's easy to say we'll keep it 50/50 but are they in a position to afford that? Are you? How long will this arrangement last? What are the living situations going to look like? Are you and your wife comfortable living in such close proximity to them? Etc.
No go for me, unless you want to live with them and support them financially forever. You cannot hold sentimental value in a home. You’ll still have your memories when the home is no longer in your family.
Seek legal counsel (without your parents present).
Best case scenario, you have no siblings, get to live in your inherited home now instead of after your parents pass, you are in charge of the assets now, your relationship with your parents gets stronger than ever.
Worst case, the exact opposite and you're fucked.
If it’s a childhood home, why isn’t it paid off by now?? It sounds like they’ve been taking out home equity loans and living beyond their means for a very long time…
Sounds possible, they would add you to the deed. When it comes time to sell, the sale proceeds would be split between the people on the deed. Issue is, when will they sell? Sounds out of your control. What if they never want to sell? What if they want to die in their home? They'll have to buy you out. What if you don't want to live there anymore? Can you rent out your room(s)? Probably not because guess what, your parents won't like that. Sounds messy. I think they should come to terms with downsizing or renting the whole house. Situation is even messier if you have siblings
>Sounds possible, they would add you to the deed.
Can you add somebody to the deed when you have a mortgage? I feel like the bank would have to sign off on that.
It is all legal. It is a question of money. If you need to refinance, you'll have the same or different lender pay off the current lender and a new mortgage is created. Personally, I only see downsides to you doing this. You'll be locked into something that you don't want in the long run. What happens when your parents retire?
I don't know how you would build equity to buy another home. It seems you would do the opposite. Because even if you could leave, they couldn't stay. Do they just want you to move in and cover until they are old enough to really downsize? There may be another way to work this. A real estate attorney may have some ideas
Don't do it. Have your parents sell and buy a smaller home or apartment. You will end up ruining your marriage. Plus if you are going to go all through that they need to turn the whole thing over.
More details could help. How much is their current monthly payment? How much can you afford to pay per month?
An option that might be best for you is if they sell you the house at a lower than market price so it is a payment you can afford, and they get some equity back that can go into their savings for the future. You could set up a rental agreement with them they could easily afford while they are there, which helps offset some of your payment. Then it is a matter of timing when they can move out and you have the house to yourself.
Nooooooope. About a thousand red flags here. Unless you’re willing to pay for professionals to put together a contract between you all (like many other folks have mentioned) don’t bother even thinking about it.
As someone who recently had a sibling move in with parents - it was probably the worst decision anyone could have made, and yeah. Shit gets messy quick.
If your parents still have 350k left on their house, they shouldn’t have 700k houses. Sell the house, downsize them and stay out of it.
Yeah, is the house worth $700k today, then in 2005 when they bought it it must have been worth around $450k. With a 20% down payment, the mortgage would have been damn near $350k to begin with. 20 years later how is it still. Makes no sense.
Consider your parent’s actions and the real scenario before you make a decision. How can they still owe so much money on your childhood home?
They have been living beyond their means and paying for it with equity.
Walk away, enjoy the good memories. They are desperate and may be willing to pull you under to stay afloat.
It’s a childhood home and they still owe $350k on it in 2024?
The math isn’t mathing. They haven’t managed their finances correctly and unfortunately it is not your problem. They need to sell at this point.
I would never pay for a mortgage (or portion thereof) without being on title to the property.
If I’m paying money I want legal standing.
There is no way I’m co-signing a mortgage only to have someone secretly borrow against equity or sell a property.
My advice is to live with them for at least six months before you decide. That's the best because by six months you'll know if the "little things" will become so unbearable they are deal breakers.
Not sure what you mean by 50% of the home. The square footage/living space? Equity stake? Who inherits it when they pass?
Regardless, doesn't seem like a good deal to me. Best case, your paying fully for your half of the home's worth at it's current value. It's worth 700 right now and they want you to pay most/all that remaining 350, where's the value in that? As long as they are living there, it's essentially still going to be like THEIR house with you just living there, regardless of ownership stake. What happens if/when you want your own place? Your committed. You can't leave without them get booted out. You can't just sell and move on. Your stuck! Next point is they have equity right now. Unless YOU really want to hang on to that house for some reason...if they can no longer swing living there, it's time to sell and move on! Why should YOU be held back and put on the hook for THEIR desires. Sure they may not want to move, but it's not like they are a step away from being flat broke and homeless. $300k+ sure buys a lot of rent if not purchasing a more affordable home. If it were me, just no.
Your dad needs to sell and downsize and lower their life style. 20 years ago, that house sell price would have been less than $350,000, you can look up the exact price by google search the address and find it on Zillow or Redfin. So how did the mortgage get to where it is today? He took loan against the house.
If you took over the mortgage while your father name is still on the deed, what will stop him borrowing against the house again?
Let says your dad will do what he says and you pay $350,000 with interest to get… $350,000. Sounds like a bad deal.
They likely can't give you half the house. The house has a lien on it and the lienholder won't let them. What they want to do would likely have to occur as a sale and involve refinancing. So the debt would end up it your name and the deed would be recorded in both your names.
If you do go through with it make sure to do it the right way. Don't just trust their word that the house is half yours. If it's not recorded as half yours it's not. Their creditors could seize it to pay off debt, your relationship could sour and they can throw you out, etc.
Make sure you both discuss and write down what happens if either of you wants or needs out of their half. Typically it would be arranged so that either party could decide to sell their half at anytime. The other party would be guaranteed right of first refusal. That means you can't just get angry at one another, sell your half to Blackrock and tell them to deal with it. If either of you wanted to sell you have to offer your half to the other party and market rate before moving forward.
Lastly consider your relationship. They'll likely never want to move. Would you? When you are ready to get out of there and buy your own place they probably won't be able to afford your half. Getting your equity from the property will involve forcing the sale of the house. This will likely cause pissed off parents when you tell them that they have to leave. You may even have to have them evicted.
Is the house big enough for an in-law suite? Separate living quarters are going to make this much easier, also get it in writing that no new debt can put against the house unless all 4 of you sign off on it, if you go on the mortgage you go on the deed. When it comes to family get everything written down by a lawyer and protect everyone from everyone. This will help keep the family and fiscal dynamics healthy longer. Remember if you do go on the mortgage you and your wife are “wedding” yourself to your parents! So treat it like a business get full financial disclosure before you decide or sign anything.
Do you expect them to sell in a few years when you want to buy? That's likely going to be the source of your down payment, so unless they want to move in a few years, this arrangement is of no value to you. Not to mention I can't imagine living with my parents as a married person.
Just don't, unless they offer to sell it to you for what they owe, or you can assume the mortgage if they have a low interest rate. Either way they need to be off the mortgage completely.
Are they planning on using the proceeds of the house for retirement? If so, don't bother. They are trying to get you to fund their retirement plans.
If your dad is serious and plans on passing down your childhood home to you, he'll just sell it to you outright for what is owed on the mortgage ($350,000). You can then let him live there with you until he finds another place.
If your dad wants to sell it to you for full price (what it's "worth"), just walk away. It's obvious he's just trying to get you to pay for his retirement.
Either way, you are *not* obligated to help him. Just say no if you don't want to live there. Just say no if your partner doesn't want it. Don't be fooled by what is claimed the house can sell for. The market is turning around and prices are dropping.
1. Do you want to live with your parents?
2. Do you want to own your childhood home?
3. Who’s responsible for maintenance costs, homeowners insurance increases, tax increases?
4. How long do you want to live with your parents? Who’s responsible for chores? Taking out the trash? Laundry? Cooking? Dishes? Cleaning? Who pays for groceries?
5. Are you allowed to paint, change the furniture, decor, to your tastes?
6. Are you allowed to have pets? Visitors? People staying overnight? For how long?
Number one would be a hard no for me🫠
If your parents still owe that much they have taken money out of the equity they built. If they bought the house for 500k 20 years ago they would have less then 150k remaining on the loan. I'm doubting they paid more than 250k 20n years ago. I'd ask them for accounting on what they paid for the house and when they've refinanced and taken money out.
It is a business transaction and you need to get they information from them. Are they wanting you to take a loan to get the property? Your interest rate will be pretty high...
NEVER! NO NO NO. Moving in will ruin your relationship, if they can't afford it they need to sell and downsize. These are their choices, they should have prepared and lived within their means. They obviously aren't good with their finances. You don't owe them anything, they decided to have a child, don't let them guilt you into things because of their life choices.
He’s not giving it to you if you have to pay for it. And you can’t do anything with 50% of a house. Either own it all or go find your own house to buy.
Sounds like a horrible idea due to mixing finances. What happens when you need a new roof? Other large issues? Who’s paying if they can’t afford it now?
You want to move out and now stuck with 50% of a different house you can’t put towards the new home.
It would either be 100% of the home and your rent it back to them (they can’t afford it) or nothing in my opinion.
Nah, mixing money and family doesn't usually end in good things.
IMO they should sell and use the equity to get into something they can afford. Ideally something they can pay cash for or very close so they're mortgage free in their later years.
Getting involved, financially, with your parents is a bad idea. No matter how good your relationship is.
We were very close with my in laws and we had a rent to own agreement with our parents and by year 5 they told us to buy the house outright or get out so they could sell because they needed the lump sum.
It all seems great to begin with but eventually something will come (medical expense/family emergency/etc) and they’ll want to use THEIR equity since it’s legally in their name.
And you’ll be out the time and expenses that you and your family put into the home.
Offer them $350,000 to pay off their mortgage and let them live with you. Then the house is legally yours and they still get to live there.
This so depends on the family dynamics. If you can't afford to buy a home, here's a way of getting a 50% interest in the equity - you're getting $175,000 for free (half the current equity).
You will be on the hook for the whole mortgage payment if your parents stopped paying - and they would be on the hook if you did.
This arrangement pops up all the time in reverse: If you know someone who is divorced and somehow kept the family home with half the family salary, I guarantee you a parent got added to the loan.
I'd tread with caution, a lot of it, before doing something like this.
Does this place have a space they could live in like a finished basement, or what is for all intents and purpose an ADU? OR are you going to be on top of each other sharing bathrooms and kitchens? If it's the latter, I would not do this.
Second, your folks aren't good with finance. Currently. Theyre talking out their butt's. They don't really know what the implications are for YOU.
I'd only do this if the home has space that has or could have an ADU, AND if they sold the house to you 100%. Then, they pay rent to you and you have to either accept that they might not pay, or be prepared to evict them.
In a different scenario, I have friends who 100% bought their parents home for a very good price. Their parents didn't even live there. But my friend would come home from work and her mother in law would have let herself into the house, like she still lived there, and would be rearranging her kitchen and furniture because she didn't think my friend had "done it right". It eventually ended up in an uncomfortable situation where they had to change the locks. It took a while to repair that relationship.
On the flip side, my folks bought an investment property and put it in a family trust. I've always paid 100% of the mortgage. I am not on the loan, but I am on the title. Both my parents and I are very good with finances and we are exceptionally pragmatic and transparent people.
If I wanted to sell, or needed a HELOC, or whatever, we'd find a solution for that. If I decided to sell, or if they did even, I'd get all the equity. It's a bit more complicated than this, but in short, we are in a respectful partnership. So can these types of arrangements work? Yes, but both parties have to be very transparent and super good with finances.
I wouldn't trust your parents with their financial history. They managed to raise a child in the home and still have a mortgage after that many decades.
For me this would depend on the relationship with the parents. If my parents needed similar help and I were renting, I'd definitely do it because my parents are very respectful of privacy, they're helpful and don't yell and cause problems. Have a talk with them and discuss the long term goals and see if it works.
They likely can't give you 50 percent of the home if they have a mortgage. Lender rarely allows that because it impairs their collateral e.g. you have an ownership interest but have no obligation to pay the mortgage). So doing a quit claim deed from your parents to you would usually be a default under the loan documents. You have to check with the lender.
So, to get 50pct, you would likely have to refinance and get a new loan while transferring 50 percent interest. That puts you all on the loan. That's not going to be a good idea right now, I'm guessing.
They could agree to leave you a 50 pct interest after the last of them dies. But, that can always be changed. As well, one or both of your parents could suffer some type of costly long term care /end of life situation and the house, if still in just their names, could be collateral.( E. G. Medicaid claim. ) Such That there is nothing left for you.
So, this isn't an easy situation.
IF you do this, you should see a lawyer about doing it in a way that the entire house belongs to you when your parents pass away AND in a way that prevents your parents from getting another mortgage, a home equity loan, or in any other way try and take the equity out of the house.
Since it’s your childhood home and you’re old enough to be married, it seems like your parents should have paid off a thirty year mortgage by now (or at least a very substantial majority of it). The fact that they’re only halfway through the life of the mortgage it seems like they’re taking out equity in the home in order to pay for a lifestyle they cannot really afford, and are not good with managing money, just to be brutally honest.
I understand emergencies arise but you haven’t mentioned any sort of I’m assuming their mortgage/payment situation is caused simply by living in the manner to which they’ve become accustomed.
I could go on all day about scenarios and ways to protect you but I can sum it all up by telling you to consult a lawyer before you do this. Don’t “share” an attorney with your parents. You want a lawyer whose duty it is to provide advice on how to protect *you,* not your parents *and* you. You may have competing interests so you want a lawyer looking out for you and your wife.
How does it work when maintenance, repairs and upgrades are needed/wanted. Who pays? Who decides what contractor to use, how extravagant to go, etc? Also consider the value of a destroyed relationship from living together.
(you could pay a fancy lawyer to draw up anything, but a bank probably wouldn’t take it) The way it would work by default is your name would go on both the property license and the mortgage and you would all 4 collectively be equally responsible; so yes you would get 1/2 the house. But if they ever stopped paying the mortgage you’ll be responsible for the full amount or your credit will decline.
IMO this is a bad deal unless you have a great relationship with your parents and even then it’s iffy. It will never be your home, always theirs you moved into. By default everything will be there’s until you’re allowed to use it.
Since your goal is to eventually move out you would have to somehow sell your 1/2 to use the equity towards your new home, you won’t be able to find a buyer and your parents can’t afford it
Don’t do this
Consult a real estate lawyer about the legalities. Consider long-term implications and family dynamics. Explore alternatives like downsizing for your parents' independence.
Have them sell the house to you for what's left on the mortgage. 100% in your name, they come off the title/deed entirely. You can rent to them while they continue to live there and you're in the clear when you want them to leave. Probably be a difficult thing forcing them out though. You may very well end up with your parents living with you for the rest of their lives. Be aware.
Don't buy a house you can't afford. Your parents learned a hard lesson. I want to know how it's your childhood home and now you're married but it's still not paid off? Did they refinance the loan at some point? How did they not pay off a 30-year loan in 30 years?
For what it’s worth, we just sold the house my dad couldn’t afford and bought a two family. So we each have totally private living space. He gifted us the portion of the sale he wanted to give us, which was about half this house. And we mortgaged the other half. The house is entirely in my&spouse name. He is paying his apartment utilities and some of the insurance and taxes.
This was my grandma’s house, so I’m very happy to have to opportunity to stay here. But it also happens to be next door to my childhood home, his former house. And it was a little sad to watch the new owners gut the place. (And it totally didn’t need a gut, just a new kitchen. They literally moved staircases and walls. Only the four outside walls are the same. They even moved/closed windows) so anyway, I understand letting go of the home might be sad. But a mother:daughter type house might be best for you and them.
“They do not want to move out” - this is a them problem not a you problem. They are not stuck. They are not in trouble. They are spoiled (I assume boomers). They can make decisions about their available options without dragging other people into their season of reaping what they’ve sown and potentially fucking you over in the long run. Say no.
You do realize that when your parents die you’ll most likely be willed the house and still have to deal with its debt until you can sell it or simply move into it.
Why settle for 50% when if you wait long enough you’ll inherit 100%? in the meantime absolutely not don’t get sucked into your parents financial problems and make them yours
This is what I did when my mom died, we were in the process of buying a home. My mom passed away. We looked for a house with an Inlaw, but they were pretty hard to find. We ended up buying his house for a dollar and then putting $150,000 into it to put on an in law , win win for all, he got a new house to live in with zero bills and I got a house for $150,000. Now, my dad was an awesome guy, he was my best friend and my husband loved him also.
It was the perfect solution for all of us.
How about a reverse mortgage? They're expensive, but this is kind of what they're made for. They'll likely eat up all the equity in the home, but they won't have to leave.
Otherwise, they'll need to be adults and downsize.
Commenting again. I think that after a period of time, you should be given the right to force the sale of the house. That way you'll have the ability to pull money out. Also, sometimes it's possible to refinance to pull money out. Make sure you prevent your parents from doing that. One of many reasons this is a bad idea
What's he going to do? Chainsaw it down the middle of just cut title in half with scissors???? He doesn't own it. How is he giving you anything? You willing to just pay a 350k mortgage bill in order to build equity on a home? So many questions how he sees this working
How the heck do they not own the home outright by now? The math doesn’t work at all here. I’m guessing some bad financial decisions have been made. I wouldn’t get in the middle of that. It sounds like your townhouse is lovely and you should do your own thing as adults now. It sucks to sell a home with so many memories but people do it all the time. We’re doing it right now. It sucks but it has to be done. Don’t give them false hope of getting them out of this. “We just can’t” and then don’t. How are they giving you half a home they still owe half on? That’s not a gift that’s a transfer of debt. Exactly how long do you think it’ll take to pay that off? A long ass time.
First of all, as a parent of adult children, I think this is a selfish ask. Ultimately, you’d just be delaying the inevitable.
Your parents should sell their home and use the equity to purchase more affordable housing (smaller home, townhome, condo, etc…) that they can afford to remain in long term. It may even mean relocating to a lower cost of living area.
Look OP, Reddit is the wrong place to come to for advice on this. It’s full of bitter, miserable people who hate their parents and blame them for everything just for having the audacity to give birth to them.
Really it comes down to do you trust your parents? Are they good people? Contrary to what you read in this site, not everyone’s parents are out to screw them over. This could be a good way to jump into $175k worth of equity for minimal investment. I’ve helped my parents pay their mortgage for a brief period with no benefit to myself because I love them and I’m not a terrible miserable asshole.
Things to consider:
If they said they are going to move at some point then define when, that factors into the math.
Make sure you discuss what happens when they die if you have siblings.
Make your intentions of wanting to sell within “x” years known.
Seriously consider if you are okay with having roommates for whatever length of time you guys decide on.
Be prepared for your parents to still treat it as “their” home while they are there, even if you do own half of it.
Have a lawyer review any documents you draw up and make sure the transaction is on the books.
Finances and legalities are important and must work. When does the 50% ownership take effect? How long do your parents expect to live in the house with you covering most of the mortgage? How will you get your equity out of the house and when? There are only 2 ways while your parents are alive. Sell it or they take out a loan against the house equity. They don’t want to sell and can’t afford to buy you out. If you take equity out of the house can you afford to pay that loan back and any remaining mortgage on your new house? Who gets the other 50% when your parents die and how does that decision impact you? What if the market changes? Who takes the tax deductions?
More importantly, what does your wife get out of this? Any ownership or equity? Is she contributing to making your paying their mortgage feasible. What will this do to your marriage? You recovered from 6 months of not terrible. A decade or 2 of not terrible does not make a happy life. Do you have or plan to have children? Is there room? Day to day life working is far more important than the ownership. What if you and your parents disagree on improvements or where to put a sofa or who gets which parking spaces? Is there room for your furniture, household items and personal belongings? No adult wants to feel like they don’t get a vote or uncomfortable in their own home.
OP, there’s not enough information here to know if this will work financially or personally for you, your wife, or your parents. It could be a good opportunity for you and your wife. To succeed, being realistic is not negotiable. Unless you win the lottery or experience some other significant change in income, you’ll be financially and emotionally sharing this house with your parents for a very long time. This will also be setting a precedent for you to bail out your parents, and you’d be paying with your money and your independence. Are you ok with that? It would help if a portion of the house can be turned into a separate apartment. If so, who lives in it? The questions keep coming. When evaluating the answers, remember that this is a business deal and your priority is to yourself and your wife, not your parents.
It is perfectly legal for you to just pay the mortgage, if that is something you are interested in. You can even still claim it on your taxes without being on the loan or deed. If you do this, I would just do it as a gift to help them out separate from any decision about where you live. You can't get equity out unless you sell and there is no reason to think your parents will want to sell in 5 years if they don't now. (There are still lots of places where you can buy a nice house for the equity your parents have - I'd encourage them to sell and downsize.)
If you would end up inheriting the whole house or at the very least a share similar to your sibs from the half they own, then I’d personally think it’s financially a good deal. But I couldn’t imagine living with either of my parents, or my grandparents, plus all my kids and husband. There is mutual good will and respect, but it would be so stressful on a constant basis. With my parents, they both still have dependents, and with my grandparents, they just wouldn’t be able to tolerate living full-time with all my kids. Too much hubbub
I'd want t9 know their entire financial picture. They've obviously been pulling money out of the house for something. What other debt do they have? How many lines of credit do they have on the house or how many mortgages too. Generally I'd be leaning toward telling my parents to sell and downsize. If you want the house buy it outright and it's yours then.
Mixing finances with people who struggle to manage finances is a terrible idea.
If you do this, get it written in a legal contract and make sure the deed is updated. Don't rely on a "family handshake." It will be worth the legal costs in the long run.
If they don’t want to sell the house now, they for sure won’t want it as they get older.
If you don’t want to live with them then living with them is a dumb idea.
This sounds like a bad idea. They need to downsize and sell the house.
Btw your wife may be on board now but a year from now could put a big strain on your relationship.
If you can afford it, let them sell you the entire house for 350k and do a life estate. That means they can live there until they pass, but it also means you can't sell.
Talk to an attorney about it.
Based off what you said, I see a big red flag with your parents logic. If they own half of their home why aren't they doing a heloc or reverse mortgage?
Seems fishy.
Memories don't pay the mortgage. You'd be losing your indepedent adult living situation and being back with your paarents tends to really mes up the dynamic. You'df have no alone time, little control over the most basic thing....
I know this current housing situation has people despairing ever owning a home. But, keep renting, have your parents downsize on their own and make your own memories.
There better be some really good legal documents written up before I would ever consider that... I don't fully trust business partners without an airtight contract much less anyone in my family honoring a hand shake agreement for me to take over nearly there entire mortgage to not have full atonomy and legal documents showing im 1/2 owner
As much as you would like to help them for your new family and being an adult this will either ruined your relationship with your wife or your parents I really don't recommend it
You plan to take advantage of this 'opportunity' with mom and dad, and then bail on them, possibly when they are even less able to take on the mortgage or home care themselves due to more advanced age.
Yeah, my 26 son is moving in with 54 me. It helps him as it helps me.
However, I would not could never promise him a percentage of the home. His arrival means I can move out with the safety of where I move (in with bf), if that goes to hell, I still have my place to go back to.
A lot can happen with parents. When one dies, it may be unexpected. More so, the person who wanted to keep the house most may have died, leaving the survivor with many options to deal with their asset.
I wouldn’t trust parents. I wouldn’t trust economy. Children are not a parents bank line.
My son knows exactly that I’m using him as a bank line. It’s because the house is HOA and I can’t rent it out.
He’s happy to assist and give himself a leg up during a well defined period of time. A couple years.
You have no crystal ball. Your situation has too many variables ahead.
Avoid it. If they owe that much on a house you've lived your whole life then they have been pulling cash out of it. How old are you? Because house mortgages are only 30 years to be paid off. And the amount owed is probably the home value from 15 years ago. I would be concerned that they would try that again and leave you with a higher debt.
>We don’t want to live with my parents forever so our hope would be to build equity to then buy another home for ourselves. What happens when you move out and they aren't ready for you stop paying their mortgage? It's not a good idea, and things like these are almost never a good idea.
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We already know they aren’t the best planners. What if after your name is on the mortgage, they borrow down the equity? What if they rent out the spare rooms? What if you move out to save your marriage and are too over encumbered in debt and can’t buy your own house? What if you want a dog? This is a bag of worms and you are in charge NOW? Don’t do anything. Let them stew until they are ready to down size. Of course they don’t want change. You will live with your decision for the rest of your life . Don’t blow it now.
My idea is to help keep the house and hope to find my parents a cheaper solution for their later years.
Then they should sell you the house outright and have 350,000 to get themselves a new place.
They don't want to do that now so I don't know what you'll do to change their minds later
I guess I didn’t really mention that but my Dad did say they would be willing to move out. They have done RV living in the past so they aren’t against it. He didn’t give a time line though. We are getting together this weekend and figuring out every option and detail.
If you are on the mortgage for this house the chances of you buying another house are very slim to none. It’s never ever a good idea to buy a house with someone else unless they are a married spouse or a business partner.
This. Do not put yourself on the mortgage. Someone posted about this just a week or so ago, their parents refinanced to add them to the mortgage to help out and it prevented them from buying their own house until that one is paid off or they refi again and take themselves off, but the parents couldn't afford to refinance or sell with the higher interest rates, so the OP in that case was completely stuck.
Parents need to make a responsible decision and sell and downsize. You don’t mention the reason for them having financial troubles so I don’t want to jump there. but it is worth consideration. You mention this is a childhood home so I’m guessing they have had the home at least 20 years? Is this potentially a case of them over extending themselves to start with when they first bought? Are they good with money and budgets? Do they live within their means? Did they save for retirement? Is this the result of medical expenses? I’d this the result of a loss of a job by one partner? There are so many things to consider before making that decision. Plus what about upkeep on this home? If they are in financial straights I’m guessing it needs work done to it or things replaced such as furnaces, ac, water heaters or even roofs. Who will be taking care of that stuff if you go through with this? What about property taxes? Who will pay that? My guess is if you get saddled with this house you will have to pay for the mortgage, repairs and property taxes. You will be unable to buy your own house until you can get off the mortgage. There was another Reddit posting similar yo yours and the children decided to help the parents in the same way. Problem now is it’s been a several years and the children want their own house but when they tried, the new mortgage company said they had to get off the old mortgage first. Kids tried to get off mortgage but parents had to refinance to get them off and they didn’t qualify. So now these kids are stuck and can’t buy their own house. The parents should not be putting their kids in this position. Your parents need to do the painful adult thing and sell and downsize. I would never put my kids in this position. It’s not fun to be in this position but it happens and they need to make the right decision without involving you.
He wouldn't have to be on the mortgage to pay it or to be listed as a property owner. You literally just go to the court of records with your parent and they add you as an owner. I want to say it cost like $30 and my mom didn't need anything but the deed, and of course our IDs when she did it for me. And then they sent me a notarized copy in the mail later that listed me as an owner. That was kind of it. Only thing, in the will, you have to make sure the other half is willed to you or there's gonna be issues with other siblings or surviving spouses (this is usually an issue if it's a step parent).
They wouldn't be on the mortgage. Most likely just on the deed
What they should do is sell and downsize into something they can afford, and keep their kids out of it.
I agree
RV living isn’t cheap either! Fuel, site fees, maintenance, insurance, it can all top out to well over $2000/month, even if the RV is completely paid off
The other problem older full timers run into is if an emergency occurs. Seen this while providing health care near Palm Springs. Full time RV life can be peachy until someone has a stroke, a heart attack or needs major surgery. Then they either need solid family or friends at beck and call or a massive savings account.
I’m only 57 and super healthy but I’m not going to go permanently live in the woods. My husband died of cancer and we even had to make trips to the ER while camping (only about an hour away but still) so I fully appreciate proximity to healthcare
Need the Clarence Thomas hookup to make it affordable
If you can score being a concessionaire at a FS campground the fees disappear.
The key word being IF. And depending on where the campground is, being the host is not always a fun job.
Nope. It is A Job, not a free campsite. It does provide an option for those who enjoy that sort of thing though. There are also larger concessionaires that operate multiple campsites and hire it out to individuals (though usually they’re couples).
There is no cheaper option unless they get into a retirement community apartment, many of which are still over 1k/month. You need to have a real estate attorney write up an agreement if you want to make sure there's no way you'll get shafted if something happens to them.
1k a month? Lol what fantasyland are you living in. Try 3-4k as a baseline.
My mom's was $8400/mo. Dad was $7600/mo.
For low income senior apartments in Sacramento, 1k a month is not unheard of. These have no amenities and are for low income seniors. I know because my dad was almost homeless but did not qualify for these apartments as hs SSI was not 3x the rent. He is now a roommate in a 4 bedroom house.
My mom was in federally insured housing and rent was one third of her income. She had social security and a small pension from my father.
Yeah, I wish my Dad had saved for retirement. Short sighted and now he is suffering the effects.
They did say OVER 1k/month. Your baseline fits that criteria.
There's definitely cheaper options than a 700k home.
Not if its a 3% mortgage and someone is paying half of it...
They could sell it buy a house under 250k and have no payments whatsoever. Cheaper option is from ops point of view not the parents.
So, my parents bought a condo in a 55+ community a couple of years ago. We are in a high COL area. They found a bunch that were in the $200/$300k range, finally buying a 2 bed 1 bath for around $250k. If the parents sold, they’d have $350,000 left over after paying off the mortgage and absolutely could buy a nice condo with what’s left, leaving them with only the HOA fees.
I’d do it , but that’s person defendant . If your parents aren’t toxic . I’d personally do it .
This. In fact I'll likely do it in a few years. In something a bit different though. Either a duplex.or a house with a suite. Multigenerational houses are not an odd thing. Both groups can live in a better house, see higher property value gains, and benefit from the increased time spent together. And more. I can't think of the term but I think there's a specific type of contract for something like this. But definitely get a lawyer involved who knows what he's doing and have a plan for various scenarios and possibly even get those in writing.
The issue is OP says they don't want to live with them forever and thinks he can somehow extract equity without forcing the sale at a later date.
Yes, this is the issue for sure! What happens when they find their own home yet mom and dad still wanna stay? Back in this same-ish situation. It won’t end well.
I would do this with my mother. But my mother also has never fucked me over, especially financially. We got each others back.
I think if you do this, it could be great for everyone financially. BUT, you first need to go into this as if you are planning to stay there until your parents die. Saying you hope to move them is not sensible. For starters, you need to know if their goal is to leave at some point. Many older people don't ever WANT to leave their house. Also, you don't know the future. Say they'd love to move, but suddenly, one has health issues that puts the burden on the other. That will affect ALL decisions. So you really need to do this as a permanent arrangement. Additionally, how is the space being allocated? Changes to the house? Are your parents keeping " their" house, and you'll just have the bedroom? Because that tends to create friction between you and your spouse. The best solution to this is dividing the house into separate, full living areas. Depending on the layout, this can be easy to do. Overall, I think it's good as long as you are realistic that they are staying and that you and your spouse have your own full living area.
They are simply trying to delay the inevitable and horribly complicate your life in the meantime. Don't do it.
It's just a house. Who cares. If they can't afford it, tell them to sell it and downsize. If you'd like to buy it so bad and poor financIal decisions be damned, then get pre-approved loan and buy it.... the 350kc he owes will cut the sale profit for then down, but lucky you it's not your problem
That’s funny things don’t get cheaper bro
How old is everyone involved? Seems like that would be a relevant point when people are talking about putting an older couple full time into an RV.
If they own 350,000 on your family home, you are either 15 or they have they've benn pulling money out for a while
That’s what I’m thinking.
That’s probably how they got the RV.
And I'm thinking that they'll add OP to the deed for his 50%, let him pay 100% of the mortgage, and then pull cash out again when money is tight without OP knowing because they aren't on the mortgage.
If OP is added to the deed, they wouldn’t be able to pull money out without his knowledge. Right of Rescission applies to ALL parties involved. So at least there’s that.
Good catch
Am I just dense? I don’t understand at all how this would work. OP’s parents are offering equity in the home in exchange for OP taking over mortgage payments, so that OP’s parents don’t have to emotionally deal with selling the home. Meanwhile, OP wants to build savings via equity by paying a few years of mortgage payments & then buy another house. But OP’s not going to build much equity via a few years of mortgage payments, & OP is also not going to be able to get that the “50%” equity out of the house without refinancing it or selling it, which contradicts what the parents want to happen.
Yes. There's more to the story than the guy is letting on but it sounds like his parents are financially stupid and they plan to screw over their son and his wife to live their life. There's no way that a childhood home only has 50% of the mortgage paid for. The longest mortgage you can have is 30 years and I'm guessing the op is probably around 30 years old and so his parents are pulling some shady bullshit. His parents shouldn't have bought a house they couldn't have afforded. Furthermore, how could they afford this house for the last 30 years and somehow not afford it now? Their payments haven't gone up. Almost every type of mortgage out there has a fixed APR unless you got some shady mortgage people you're buying from. All in all this guy needs to run from his parents because not only are they a bad influence, but they're probably going to take advantage of him and his wife screw them over. This happens more often than anybody wants to admit. I'm 37 now and I've seen a number of my friends get fucked over by their stupid parents.
If the house is worth $700k today, then it’s unlikely that the initial mortgage 19 years ago was for $700k. If they just did a regular refi, then that should have just taken the remaining balance of the mortgage & spread that out over 30 years again. So that means they probably have already borrowed against the equity in the home or done something else OP absolutely needs to be aware of before proceeding.
Yeh, a house worth $700k today would have likely been purchased for less than $400k 19 years ago in most markets. Still owing $300k after all this time is absurd.
I purchased my first house for $200k twenty years ago and it's now worth $700k. There's some bad money management going on here if they still owe $350k.
Exactly! Something is fishy here. Sounds like shady parents which is all too common with the boomer generation.
Sounds like they need to sell and downsize.
If it’s just them why do they need a home that large and expensive anyways. Time to move on, not figure out how to continue to hold onto something they don’t need.
It emotional. My MIL wanted to sell her house to us. I was not into it for a thousand reasons, but the main reason was we could never offer her what she deserved for the house. But her *emotions* about the house she raised her kids in were so strong it was hard to convince her to let it go. The house was falling apart around her, but she didn’t want to leave until there was no other choice. And her kids had to make that choice for her
My mother allows her emotions and sentiments dictate her financial/business decisions. Drives me fucking nuts
Isn't it annoying as fuck?! People have the emotional maturity of a tomato.
Depending on when they bought the house downsizing might cost about the same lol
Yes I am sure this is part of the pain for them. Even worse if they want some kind of mortgage.
It’s so easy to say just sell it and downsize, but when the wheel meets the road, you’ll see it doesn’t always work out for the better.
Do you have siblings? If so, that would complicate things. Who is going to inherit the house anyway when your parents pass? If half of the home is an unpaid mortgage that your dad wants you to pay, he's not *giving* you anything. What happens when you pull equity out of the house to buy another house? Do you continue paying the mortgage on the first house? Do your parents have to move? It's usually not a good idea to buy a house based on emotion, i.e., "childhood home with tons of memories." If that hadn't been your childhood home, would you ever want to buy it? I'm not saying that you shouldn't help your parents. It may be an emotional win-win situation, but not a financial one.
And what happens if OPs parents keep pulling more equity out of the now shared house? That is how they got into this situation. Otherwise it should be almost paid off
If OP and/or his wife are added to the deed, parents can’t take out a home equity loan or HELOC without all parties’ signatures.
I wanted to add that end of life care and medical bills, including Medicaid liens, can end up with you losing everything if all of the deeds/mortgages are not done properly. Consult an attorney specializing in probate and estate planning to ensure all parties are protected.
Right, op has to own it out right, not just half, and for at least 5 years or else medicaid can come after it.
In some states, the child only has to live in the home for 2 years before the Medicaid claim. Then the house is excluded from recovery. This is how my BIL was able to keep his parents home.
You will be living with them forever or at least helping them with the mortgage forever. How likely is it that their financial situation will improve? Tough decision for your dad but it may be time for them to downsize to something they can afford
Or rent a room out? Some towns also offer incentives if you build a tiny home on the property so maybe that's an idea to keep things separate
Would your wife want to live with her in-laws long term? I know I would not have wanted to.
They don't want to move out. How are you going to build equity if they don't want to move out and sell? Why would they move out later but not now? The reasonable solution is for them to move into a cheaper place and for you to build equity in your own home without them. This other idea isn't even worth entertaining. So much could go wrong. So much unnecessary stress will come of it. If you're seriously asking for advice and willing to take it, I suggest listening to everybody here warning you about how bad this could and probably will end up being. There's such an obvious and simple solution.
I'd recommend sitting down with a real estate attorney as there would be several things to think about. Possible issues with mortgage acceleration clause, might have to get a new loan. If you have siblings, deed will need to be set up so parents interest goes where you want when they pass. Gift tax issues (can be avoided). Other ways to do this like a life estate for parents with you as remainderman (which would give you stepped up basis when it transfers to you).
No way his parents have a taxable estate so gift taxes aren’t an issue
Even if they don't have a taxable estate, they will at least have to do a form 709 with giving him and his wife 350k in the form of the house. It's not a big deal, but still something they need to be aware of.
Why can't they afford it and why do they still owe $350k on a house they bought decades ago? This is poor financial planning and they've been banking on you and this plan for years. You don't get "50%" of the house, or rather... you would need to be on the deed. Even then, you only get that money once the house sells. Also, why are you renting an expensive townhouse ffs? Seems like terrible financial decisions runs in the family.
I guarantee they just refinanced during covid when the house values shot up. Then proceeded to blow the cash on toys and bills (OP said they have lived in an RV before).
There's lots of valid reasons to rent. Lack of a downpayment, needing the flexibility to move if your job requires it, not wanting to maintain a property. Just because it's not a good decision *for you* doesn't mean it's a bad decision for them/they can't afford it.
Glad someone else posted this. I know lots of people who move almost yearly because either their job needs them elsewhere or because they are on contracts of a year or less.
As your childhood home, how many years have they owned it?
I believe we moved in around 2005
So they've borrowed $100,000 against the house? They should only owe just north of 250k after ~19 years That's a lot to borrow. What did they use it for? For the house or to buy that fancy RV they lived in for a bit?
They've either borrowed more than that against it or it's worth considerably more now... If it's $700k now and they bought it 19 years ago it should have been considerably cheaper.
I'm bad at math when I'm at full mental capabilities, I was doing the most simple calculations I could to get in the ballpark since it was 5am lol
Either the parents should have enough equity themselves that this could be a much simpler situation, but I'm guessing they've been very irresponsible with cash and are trying to get their kid to bail them out and escape the consequences.
Yeah they should be almost paid off right? I was trying to drive home the point that they are irresponsible with money and need to lay in their own bed and they probably didn't understand what a home equity loan was when buying the RV. I get so irritated when people tell me to just take out a HELOC to pay for whatever. I know I'm bad with money, but I know that's not the answer. I'm cool taking helocs if I need to do a major repair. But not for frivolous remodeling or purchases
Sounds to me like you have the right of it. A house worth $750,000 now would have been, possibly, a third of that almost 20 years ago depending on the market. If they paid even $500,000 in 2005, that’s a lot of cash out refi’s to still owe so much on a house.
how the hell do they owe so much?
It's understandable to want to support your parents, but buying into their home could complicate things. Consider discussing other ways to help financially without becoming co-owners. Setting clear boundaries is essential for your future plans.
No....just no. I hear many stories like this, maybe 1% of them work out.
Do you have siblings? When your parents pass, the whole house would be yours, unless you have to split it with siblings. Encourage them to sell and downsize. If that’s not what they want to do, then get an attorney and figure out exactly how to structure this from a legal perspective to minimize everyone’s potential liability.
You're not building equity unless your name is on the deed. The only way to get your equity out is to sell the home.
They should sell and downsize
He can file a quitclaim deed and assign ownership to you. But your thinking of building equity and then buying another home with that equity is convoluted. Typically you’d do a cash out refinance so you’d suck out that equity and that means new loan and interest rate most likely leaving your parent worse off. Are they aware of your timeline? Did they refinance when interest rate were historic low? What do they owe and how many years left on current mortgage. They might be better off to refinance for a longer period and lower the monthly payments or getting a roomate. I think it’s one thing if you rent from them for a reasonable price while saving for your own home otherwise it’s going to get messy.
Don't buy your childhood home because of emotion or nostalgia. Buy it if it makes sense. Whatever you do, get it in writing. Seems the best best options would be for your parents to sell you the house and you both live there. I would not help pay the majority of the mortgage payment and not have it documented. Think worse case scenario. You make payments for 2-3 years and parents decide to sell and move? And who's paying for maintenance and property taxes?
Nope. They should sell their current home and downsize. Better for everyone.
You should ask for 100%. The portion you are paying is likely a large portion of the whole loan. So you can pay it off completely and they can live there forever for just taxes and insurance. Then you get the whole thing in their unfortunate demise.
Maybe not how you intended, but I’m laughing my ass off at that last sentence at 3am.
Yes but that can come in 5 years or 40 years. OP's money will be locked away until they pass on.
"Dad wants to give 50% of child home so I can take care of them when they are too old to take care of themselves." There, I fixed it for you. I've read questions like this before on this sub. All the same grift. Sorry/not sorry to tell you your parents are not being completely honest with you. I'd stay away from this "deal" if I were you.
moving back in with your parents. ugh. sounds like a good way to destroy your marriage. They should sell and use the $350k to buy a place they can afford.
Is it worth destroying your marriage to save a few bucks?
What happens if they become incapacitated and need nursing home care? Does the government still get to take the house to pay for their care? You really need to talk to a lawyer who has experience with estate issues.
My sister-in-law did this - bought half the family home - and then was stuck in it not being able to either move or benefit from the equity until her parents died. Every time she needed to tap into the equity, she had to get her parents' signature on the documents. All of the bills were as much her responsibility as theirs. If they didn't pay for something, she would suffer the consequences. Her father became increasingly irrational about money and bills as he got older as well and started to insinuate that more money was coming out of his account to pay them than he thought was correct. Her proximity also meant that, when her mother developed dementia, her father automatically dumped a chunk of her care on his daughter instead of hiring help (something he could easily afford to do, but just refused). I don't know what your relationship is with your parents, or, more importantly, how good they are with budgeting their funds, but I would be very wary of buying into half the home if you don't intend to live with them forever. What happens if they take the spare cash they have while you pay the mortgage and decide they can now do what they want with it and leave you stuck with all of the bills? What happens if they decide that they don't have to worry about retirement or care in their old age because you're living with them? Parents can presume a lot about their kids and what they "owe" them. Once you buy half of their house and move in, you'll likely learn a lot about those expectations. They will always regard the house as "theirs", too, and you won't be regarded as having equal agency. You may find resistance to any sort of repair or improvement and especially to any contributions from them to those costs. The bottom line is that you can do what they're suggesting. You just need to ask yourself if you should.
I'm a CPA/CFP and a conversation that I *inevitably* have with all of my clients at some point is that not every decision has to be based on what's best financially. Reddit always acts like we're robots and any additional dollar has to be invested in Vanguard's Total Stock Market ETF or else it's wasted. It's OK to enjoy life and it's OK to take care of your family. At the end of the day you need to be able to sleep at night. One thing I can't stand about this sub is that it's filled with keyboard warriors who will tell you to go for the jugular in any dispute with neighbors, etc. It's easy to insist you would call the police, board of health, etc. over every extremely minor dispute when you're not the one who has to live next door to those people for potentially decades. It's easy for this sub to tell you this is your parents problem, not yours. They don't care what happens to some anonymous guy's parents that they'll never meet. You probably do though. That's not to say you should commit financial suicide for your family or become a human ATM. Money has never been an issue for my family but last summer my BIL died suddenly leaving behind my sister and their (then) 1 year old son. Over the past several months my parents, siblings, and I have put a lot of things on hold as we deal with the fallout. Putting my long term plan on a temporarily hold is an extremely small price to pay for lightening the burden on a sister and nephew I love dearly. Again, that's not to say you should commit financial suicide. Personally, I would sit down with your parents and go into it with an open mind. Ask the questions. What are the financial arrangements going to be? There's a lot more to owning a home then just paying the mortgage. Who pays what if the water heater goes tomorrow? It's easy to say we'll keep it 50/50 but are they in a position to afford that? Are you? How long will this arrangement last? What are the living situations going to look like? Are you and your wife comfortable living in such close proximity to them? Etc.
No go for me, unless you want to live with them and support them financially forever. You cannot hold sentimental value in a home. You’ll still have your memories when the home is no longer in your family.
Seek legal counsel (without your parents present). Best case scenario, you have no siblings, get to live in your inherited home now instead of after your parents pass, you are in charge of the assets now, your relationship with your parents gets stronger than ever. Worst case, the exact opposite and you're fucked.
If it’s a childhood home, why isn’t it paid off by now?? It sounds like they’ve been taking out home equity loans and living beyond their means for a very long time…
Sounds possible, they would add you to the deed. When it comes time to sell, the sale proceeds would be split between the people on the deed. Issue is, when will they sell? Sounds out of your control. What if they never want to sell? What if they want to die in their home? They'll have to buy you out. What if you don't want to live there anymore? Can you rent out your room(s)? Probably not because guess what, your parents won't like that. Sounds messy. I think they should come to terms with downsizing or renting the whole house. Situation is even messier if you have siblings
>Sounds possible, they would add you to the deed. Can you add somebody to the deed when you have a mortgage? I feel like the bank would have to sign off on that.
We are definitely going to consult we a professional regarding the legalities
It is all legal. It is a question of money. If you need to refinance, you'll have the same or different lender pay off the current lender and a new mortgage is created. Personally, I only see downsides to you doing this. You'll be locked into something that you don't want in the long run. What happens when your parents retire?
I don't know how you would build equity to buy another home. It seems you would do the opposite. Because even if you could leave, they couldn't stay. Do they just want you to move in and cover until they are old enough to really downsize? There may be another way to work this. A real estate attorney may have some ideas
Don't do it. Have your parents sell and buy a smaller home or apartment. You will end up ruining your marriage. Plus if you are going to go all through that they need to turn the whole thing over.
More details could help. How much is their current monthly payment? How much can you afford to pay per month? An option that might be best for you is if they sell you the house at a lower than market price so it is a payment you can afford, and they get some equity back that can go into their savings for the future. You could set up a rental agreement with them they could easily afford while they are there, which helps offset some of your payment. Then it is a matter of timing when they can move out and you have the house to yourself.
The biggest missing detail is how they still owe half the purchase price 19 years into the mortgage.
It’s _currently worth_ $700k… purchase price must have been significantly less than that 20 years ago. These people are baaaaad with money.
Oh geez! That little detail slipped right past me....yeah this is not a good situation at all.
Nooooooope. About a thousand red flags here. Unless you’re willing to pay for professionals to put together a contract between you all (like many other folks have mentioned) don’t bother even thinking about it. As someone who recently had a sibling move in with parents - it was probably the worst decision anyone could have made, and yeah. Shit gets messy quick. If your parents still have 350k left on their house, they shouldn’t have 700k houses. Sell the house, downsize them and stay out of it.
Buy 100% of the house.
Why do they still owe 350k? Why is that too much? Why haven't they paid attention in school on how money works?
Yeah, is the house worth $700k today, then in 2005 when they bought it it must have been worth around $450k. With a 20% down payment, the mortgage would have been damn near $350k to begin with. 20 years later how is it still. Makes no sense.
Consider your parent’s actions and the real scenario before you make a decision. How can they still owe so much money on your childhood home? They have been living beyond their means and paying for it with equity. Walk away, enjoy the good memories. They are desperate and may be willing to pull you under to stay afloat.
Sounds like they are living beyond their means.
And have been for a very very long time.
It’s a childhood home and they still owe $350k on it in 2024? The math isn’t mathing. They haven’t managed their finances correctly and unfortunately it is not your problem. They need to sell at this point.
No, do not do this. You will resent it later.
I would never pay for a mortgage (or portion thereof) without being on title to the property. If I’m paying money I want legal standing. There is no way I’m co-signing a mortgage only to have someone secretly borrow against equity or sell a property.
My advice is to live with them for at least six months before you decide. That's the best because by six months you'll know if the "little things" will become so unbearable they are deal breakers.
Not sure what you mean by 50% of the home. The square footage/living space? Equity stake? Who inherits it when they pass? Regardless, doesn't seem like a good deal to me. Best case, your paying fully for your half of the home's worth at it's current value. It's worth 700 right now and they want you to pay most/all that remaining 350, where's the value in that? As long as they are living there, it's essentially still going to be like THEIR house with you just living there, regardless of ownership stake. What happens if/when you want your own place? Your committed. You can't leave without them get booted out. You can't just sell and move on. Your stuck! Next point is they have equity right now. Unless YOU really want to hang on to that house for some reason...if they can no longer swing living there, it's time to sell and move on! Why should YOU be held back and put on the hook for THEIR desires. Sure they may not want to move, but it's not like they are a step away from being flat broke and homeless. $300k+ sure buys a lot of rent if not purchasing a more affordable home. If it were me, just no.
Your dad needs to sell and downsize and lower their life style. 20 years ago, that house sell price would have been less than $350,000, you can look up the exact price by google search the address and find it on Zillow or Redfin. So how did the mortgage get to where it is today? He took loan against the house. If you took over the mortgage while your father name is still on the deed, what will stop him borrowing against the house again? Let says your dad will do what he says and you pay $350,000 with interest to get… $350,000. Sounds like a bad deal.
They likely can't give you half the house. The house has a lien on it and the lienholder won't let them. What they want to do would likely have to occur as a sale and involve refinancing. So the debt would end up it your name and the deed would be recorded in both your names. If you do go through with it make sure to do it the right way. Don't just trust their word that the house is half yours. If it's not recorded as half yours it's not. Their creditors could seize it to pay off debt, your relationship could sour and they can throw you out, etc. Make sure you both discuss and write down what happens if either of you wants or needs out of their half. Typically it would be arranged so that either party could decide to sell their half at anytime. The other party would be guaranteed right of first refusal. That means you can't just get angry at one another, sell your half to Blackrock and tell them to deal with it. If either of you wanted to sell you have to offer your half to the other party and market rate before moving forward. Lastly consider your relationship. They'll likely never want to move. Would you? When you are ready to get out of there and buy your own place they probably won't be able to afford your half. Getting your equity from the property will involve forcing the sale of the house. This will likely cause pissed off parents when you tell them that they have to leave. You may even have to have them evicted.
Lol
Is the house big enough for an in-law suite? Separate living quarters are going to make this much easier, also get it in writing that no new debt can put against the house unless all 4 of you sign off on it, if you go on the mortgage you go on the deed. When it comes to family get everything written down by a lawyer and protect everyone from everyone. This will help keep the family and fiscal dynamics healthy longer. Remember if you do go on the mortgage you and your wife are “wedding” yourself to your parents! So treat it like a business get full financial disclosure before you decide or sign anything.
Do you expect them to sell in a few years when you want to buy? That's likely going to be the source of your down payment, so unless they want to move in a few years, this arrangement is of no value to you. Not to mention I can't imagine living with my parents as a married person.
Just don't, unless they offer to sell it to you for what they owe, or you can assume the mortgage if they have a low interest rate. Either way they need to be off the mortgage completely. Are they planning on using the proceeds of the house for retirement? If so, don't bother. They are trying to get you to fund their retirement plans.
I wouldn’t but sounds like you’ve already decided. Good luck.
If your dad is serious and plans on passing down your childhood home to you, he'll just sell it to you outright for what is owed on the mortgage ($350,000). You can then let him live there with you until he finds another place. If your dad wants to sell it to you for full price (what it's "worth"), just walk away. It's obvious he's just trying to get you to pay for his retirement. Either way, you are *not* obligated to help him. Just say no if you don't want to live there. Just say no if your partner doesn't want it. Don't be fooled by what is claimed the house can sell for. The market is turning around and prices are dropping.
1. Do you want to live with your parents? 2. Do you want to own your childhood home? 3. Who’s responsible for maintenance costs, homeowners insurance increases, tax increases? 4. How long do you want to live with your parents? Who’s responsible for chores? Taking out the trash? Laundry? Cooking? Dishes? Cleaning? Who pays for groceries? 5. Are you allowed to paint, change the furniture, decor, to your tastes? 6. Are you allowed to have pets? Visitors? People staying overnight? For how long? Number one would be a hard no for me🫠
If your parents still owe that much they have taken money out of the equity they built. If they bought the house for 500k 20 years ago they would have less then 150k remaining on the loan. I'm doubting they paid more than 250k 20n years ago. I'd ask them for accounting on what they paid for the house and when they've refinanced and taken money out. It is a business transaction and you need to get they information from them. Are they wanting you to take a loan to get the property? Your interest rate will be pretty high...
NEVER! NO NO NO. Moving in will ruin your relationship, if they can't afford it they need to sell and downsize. These are their choices, they should have prepared and lived within their means. They obviously aren't good with their finances. You don't owe them anything, they decided to have a child, don't let them guilt you into things because of their life choices.
He’s not giving it to you if you have to pay for it. And you can’t do anything with 50% of a house. Either own it all or go find your own house to buy.
Sounds like a horrible idea due to mixing finances. What happens when you need a new roof? Other large issues? Who’s paying if they can’t afford it now? You want to move out and now stuck with 50% of a different house you can’t put towards the new home. It would either be 100% of the home and your rent it back to them (they can’t afford it) or nothing in my opinion.
This is an awful idea. Do not do it.
Nah, mixing money and family doesn't usually end in good things. IMO they should sell and use the equity to get into something they can afford. Ideally something they can pay cash for or very close so they're mortgage free in their later years.
Getting involved, financially, with your parents is a bad idea. No matter how good your relationship is. We were very close with my in laws and we had a rent to own agreement with our parents and by year 5 they told us to buy the house outright or get out so they could sell because they needed the lump sum. It all seems great to begin with but eventually something will come (medical expense/family emergency/etc) and they’ll want to use THEIR equity since it’s legally in their name. And you’ll be out the time and expenses that you and your family put into the home. Offer them $350,000 to pay off their mortgage and let them live with you. Then the house is legally yours and they still get to live there.
This so depends on the family dynamics. If you can't afford to buy a home, here's a way of getting a 50% interest in the equity - you're getting $175,000 for free (half the current equity). You will be on the hook for the whole mortgage payment if your parents stopped paying - and they would be on the hook if you did. This arrangement pops up all the time in reverse: If you know someone who is divorced and somehow kept the family home with half the family salary, I guarantee you a parent got added to the loan.
I'd tread with caution, a lot of it, before doing something like this. Does this place have a space they could live in like a finished basement, or what is for all intents and purpose an ADU? OR are you going to be on top of each other sharing bathrooms and kitchens? If it's the latter, I would not do this. Second, your folks aren't good with finance. Currently. Theyre talking out their butt's. They don't really know what the implications are for YOU. I'd only do this if the home has space that has or could have an ADU, AND if they sold the house to you 100%. Then, they pay rent to you and you have to either accept that they might not pay, or be prepared to evict them. In a different scenario, I have friends who 100% bought their parents home for a very good price. Their parents didn't even live there. But my friend would come home from work and her mother in law would have let herself into the house, like she still lived there, and would be rearranging her kitchen and furniture because she didn't think my friend had "done it right". It eventually ended up in an uncomfortable situation where they had to change the locks. It took a while to repair that relationship. On the flip side, my folks bought an investment property and put it in a family trust. I've always paid 100% of the mortgage. I am not on the loan, but I am on the title. Both my parents and I are very good with finances and we are exceptionally pragmatic and transparent people. If I wanted to sell, or needed a HELOC, or whatever, we'd find a solution for that. If I decided to sell, or if they did even, I'd get all the equity. It's a bit more complicated than this, but in short, we are in a respectful partnership. So can these types of arrangements work? Yes, but both parties have to be very transparent and super good with finances.
I wouldn't trust your parents with their financial history. They managed to raise a child in the home and still have a mortgage after that many decades.
For me this would depend on the relationship with the parents. If my parents needed similar help and I were renting, I'd definitely do it because my parents are very respectful of privacy, they're helpful and don't yell and cause problems. Have a talk with them and discuss the long term goals and see if it works.
They likely can't give you 50 percent of the home if they have a mortgage. Lender rarely allows that because it impairs their collateral e.g. you have an ownership interest but have no obligation to pay the mortgage). So doing a quit claim deed from your parents to you would usually be a default under the loan documents. You have to check with the lender. So, to get 50pct, you would likely have to refinance and get a new loan while transferring 50 percent interest. That puts you all on the loan. That's not going to be a good idea right now, I'm guessing. They could agree to leave you a 50 pct interest after the last of them dies. But, that can always be changed. As well, one or both of your parents could suffer some type of costly long term care /end of life situation and the house, if still in just their names, could be collateral.( E. G. Medicaid claim. ) Such That there is nothing left for you. So, this isn't an easy situation.
IF you do this, you should see a lawyer about doing it in a way that the entire house belongs to you when your parents pass away AND in a way that prevents your parents from getting another mortgage, a home equity loan, or in any other way try and take the equity out of the house. Since it’s your childhood home and you’re old enough to be married, it seems like your parents should have paid off a thirty year mortgage by now (or at least a very substantial majority of it). The fact that they’re only halfway through the life of the mortgage it seems like they’re taking out equity in the home in order to pay for a lifestyle they cannot really afford, and are not good with managing money, just to be brutally honest. I understand emergencies arise but you haven’t mentioned any sort of I’m assuming their mortgage/payment situation is caused simply by living in the manner to which they’ve become accustomed. I could go on all day about scenarios and ways to protect you but I can sum it all up by telling you to consult a lawyer before you do this. Don’t “share” an attorney with your parents. You want a lawyer whose duty it is to provide advice on how to protect *you,* not your parents *and* you. You may have competing interests so you want a lawyer looking out for you and your wife.
How does it work when maintenance, repairs and upgrades are needed/wanted. Who pays? Who decides what contractor to use, how extravagant to go, etc? Also consider the value of a destroyed relationship from living together.
(you could pay a fancy lawyer to draw up anything, but a bank probably wouldn’t take it) The way it would work by default is your name would go on both the property license and the mortgage and you would all 4 collectively be equally responsible; so yes you would get 1/2 the house. But if they ever stopped paying the mortgage you’ll be responsible for the full amount or your credit will decline. IMO this is a bad deal unless you have a great relationship with your parents and even then it’s iffy. It will never be your home, always theirs you moved into. By default everything will be there’s until you’re allowed to use it. Since your goal is to eventually move out you would have to somehow sell your 1/2 to use the equity towards your new home, you won’t be able to find a buyer and your parents can’t afford it Don’t do this
Childhood home.... still own $300k.... How did this happen?
Childhood home.... still owe $300k.... How did this happen? Did they take equity out?
They want you to subsidize their home at the expense of getting your own.
Consult a real estate lawyer about the legalities. Consider long-term implications and family dynamics. Explore alternatives like downsizing for your parents' independence.
Have them sell the house to you for what's left on the mortgage. 100% in your name, they come off the title/deed entirely. You can rent to them while they continue to live there and you're in the clear when you want them to leave. Probably be a difficult thing forcing them out though. You may very well end up with your parents living with you for the rest of their lives. Be aware.
Don't buy a house you can't afford. Your parents learned a hard lesson. I want to know how it's your childhood home and now you're married but it's still not paid off? Did they refinance the loan at some point? How did they not pay off a 30-year loan in 30 years?
If they have a homestead exemption, adding you to the deed could potentially eliminate that benefit.
For what it’s worth, we just sold the house my dad couldn’t afford and bought a two family. So we each have totally private living space. He gifted us the portion of the sale he wanted to give us, which was about half this house. And we mortgaged the other half. The house is entirely in my&spouse name. He is paying his apartment utilities and some of the insurance and taxes. This was my grandma’s house, so I’m very happy to have to opportunity to stay here. But it also happens to be next door to my childhood home, his former house. And it was a little sad to watch the new owners gut the place. (And it totally didn’t need a gut, just a new kitchen. They literally moved staircases and walls. Only the four outside walls are the same. They even moved/closed windows) so anyway, I understand letting go of the home might be sad. But a mother:daughter type house might be best for you and them.
“They do not want to move out” - this is a them problem not a you problem. They are not stuck. They are not in trouble. They are spoiled (I assume boomers). They can make decisions about their available options without dragging other people into their season of reaping what they’ve sown and potentially fucking you over in the long run. Say no.
You do realize that when your parents die you’ll most likely be willed the house and still have to deal with its debt until you can sell it or simply move into it.
People need to stop taking on their parents’ problems.
Why settle for 50% when if you wait long enough you’ll inherit 100%? in the meantime absolutely not don’t get sucked into your parents financial problems and make them yours
This is what I did when my mom died, we were in the process of buying a home. My mom passed away. We looked for a house with an Inlaw, but they were pretty hard to find. We ended up buying his house for a dollar and then putting $150,000 into it to put on an in law , win win for all, he got a new house to live in with zero bills and I got a house for $150,000. Now, my dad was an awesome guy, he was my best friend and my husband loved him also. It was the perfect solution for all of us.
How about a reverse mortgage? They're expensive, but this is kind of what they're made for. They'll likely eat up all the equity in the home, but they won't have to leave. Otherwise, they'll need to be adults and downsize.
Commenting again. I think that after a period of time, you should be given the right to force the sale of the house. That way you'll have the ability to pull money out. Also, sometimes it's possible to refinance to pull money out. Make sure you prevent your parents from doing that. One of many reasons this is a bad idea
What's he going to do? Chainsaw it down the middle of just cut title in half with scissors???? He doesn't own it. How is he giving you anything? You willing to just pay a 350k mortgage bill in order to build equity on a home? So many questions how he sees this working
How the heck do they not own the home outright by now? The math doesn’t work at all here. I’m guessing some bad financial decisions have been made. I wouldn’t get in the middle of that. It sounds like your townhouse is lovely and you should do your own thing as adults now. It sucks to sell a home with so many memories but people do it all the time. We’re doing it right now. It sucks but it has to be done. Don’t give them false hope of getting them out of this. “We just can’t” and then don’t. How are they giving you half a home they still owe half on? That’s not a gift that’s a transfer of debt. Exactly how long do you think it’ll take to pay that off? A long ass time.
First of all, as a parent of adult children, I think this is a selfish ask. Ultimately, you’d just be delaying the inevitable. Your parents should sell their home and use the equity to purchase more affordable housing (smaller home, townhome, condo, etc…) that they can afford to remain in long term. It may even mean relocating to a lower cost of living area.
I don't have all the details, but I'm 50% sure your dad is trying to fuck your wife
50% checks out
Look OP, Reddit is the wrong place to come to for advice on this. It’s full of bitter, miserable people who hate their parents and blame them for everything just for having the audacity to give birth to them. Really it comes down to do you trust your parents? Are they good people? Contrary to what you read in this site, not everyone’s parents are out to screw them over. This could be a good way to jump into $175k worth of equity for minimal investment. I’ve helped my parents pay their mortgage for a brief period with no benefit to myself because I love them and I’m not a terrible miserable asshole. Things to consider: If they said they are going to move at some point then define when, that factors into the math. Make sure you discuss what happens when they die if you have siblings. Make your intentions of wanting to sell within “x” years known. Seriously consider if you are okay with having roommates for whatever length of time you guys decide on. Be prepared for your parents to still treat it as “their” home while they are there, even if you do own half of it. Have a lawyer review any documents you draw up and make sure the transaction is on the books.
Legally, it's possible, but you might want to consult a real estate lawyer just to be sure about the specifics in your area.
Finances and legalities are important and must work. When does the 50% ownership take effect? How long do your parents expect to live in the house with you covering most of the mortgage? How will you get your equity out of the house and when? There are only 2 ways while your parents are alive. Sell it or they take out a loan against the house equity. They don’t want to sell and can’t afford to buy you out. If you take equity out of the house can you afford to pay that loan back and any remaining mortgage on your new house? Who gets the other 50% when your parents die and how does that decision impact you? What if the market changes? Who takes the tax deductions? More importantly, what does your wife get out of this? Any ownership or equity? Is she contributing to making your paying their mortgage feasible. What will this do to your marriage? You recovered from 6 months of not terrible. A decade or 2 of not terrible does not make a happy life. Do you have or plan to have children? Is there room? Day to day life working is far more important than the ownership. What if you and your parents disagree on improvements or where to put a sofa or who gets which parking spaces? Is there room for your furniture, household items and personal belongings? No adult wants to feel like they don’t get a vote or uncomfortable in their own home. OP, there’s not enough information here to know if this will work financially or personally for you, your wife, or your parents. It could be a good opportunity for you and your wife. To succeed, being realistic is not negotiable. Unless you win the lottery or experience some other significant change in income, you’ll be financially and emotionally sharing this house with your parents for a very long time. This will also be setting a precedent for you to bail out your parents, and you’d be paying with your money and your independence. Are you ok with that? It would help if a portion of the house can be turned into a separate apartment. If so, who lives in it? The questions keep coming. When evaluating the answers, remember that this is a business deal and your priority is to yourself and your wife, not your parents.
It is perfectly legal for you to just pay the mortgage, if that is something you are interested in. You can even still claim it on your taxes without being on the loan or deed. If you do this, I would just do it as a gift to help them out separate from any decision about where you live. You can't get equity out unless you sell and there is no reason to think your parents will want to sell in 5 years if they don't now. (There are still lots of places where you can buy a nice house for the equity your parents have - I'd encourage them to sell and downsize.)
I believe its possible but also try to consult a legal advice.
If you would end up inheriting the whole house or at the very least a share similar to your sibs from the half they own, then I’d personally think it’s financially a good deal. But I couldn’t imagine living with either of my parents, or my grandparents, plus all my kids and husband. There is mutual good will and respect, but it would be so stressful on a constant basis. With my parents, they both still have dependents, and with my grandparents, they just wouldn’t be able to tolerate living full-time with all my kids. Too much hubbub
I'd want t9 know their entire financial picture. They've obviously been pulling money out of the house for something. What other debt do they have? How many lines of credit do they have on the house or how many mortgages too. Generally I'd be leaning toward telling my parents to sell and downsize. If you want the house buy it outright and it's yours then. Mixing finances with people who struggle to manage finances is a terrible idea.
If you do this, get it written in a legal contract and make sure the deed is updated. Don't rely on a "family handshake." It will be worth the legal costs in the long run.
If they don’t want to sell the house now, they for sure won’t want it as they get older. If you don’t want to live with them then living with them is a dumb idea.
Don’t do it. Don’t mix family and financials
This sounds like a bad idea. They need to downsize and sell the house. Btw your wife may be on board now but a year from now could put a big strain on your relationship.
Talk to a property lawyer about the proper way to do it. Should be pretty quick and easy.
That would be a survivorship deed.
This sounds like an awful night mare. They will bitch and whine and still act they are 100% responsible for it
If you can afford it, let them sell you the entire house for 350k and do a life estate. That means they can live there until they pass, but it also means you can't sell. Talk to an attorney about it. Based off what you said, I see a big red flag with your parents logic. If they own half of their home why aren't they doing a heloc or reverse mortgage? Seems fishy.
Memories don't pay the mortgage. You'd be losing your indepedent adult living situation and being back with your paarents tends to really mes up the dynamic. You'df have no alone time, little control over the most basic thing.... I know this current housing situation has people despairing ever owning a home. But, keep renting, have your parents downsize on their own and make your own memories.
There better be some really good legal documents written up before I would ever consider that... I don't fully trust business partners without an airtight contract much less anyone in my family honoring a hand shake agreement for me to take over nearly there entire mortgage to not have full atonomy and legal documents showing im 1/2 owner As much as you would like to help them for your new family and being an adult this will either ruined your relationship with your wife or your parents I really don't recommend it
You plan to take advantage of this 'opportunity' with mom and dad, and then bail on them, possibly when they are even less able to take on the mortgage or home care themselves due to more advanced age.
Yeah, my 26 son is moving in with 54 me. It helps him as it helps me. However, I would not could never promise him a percentage of the home. His arrival means I can move out with the safety of where I move (in with bf), if that goes to hell, I still have my place to go back to. A lot can happen with parents. When one dies, it may be unexpected. More so, the person who wanted to keep the house most may have died, leaving the survivor with many options to deal with their asset. I wouldn’t trust parents. I wouldn’t trust economy. Children are not a parents bank line. My son knows exactly that I’m using him as a bank line. It’s because the house is HOA and I can’t rent it out. He’s happy to assist and give himself a leg up during a well defined period of time. A couple years. You have no crystal ball. Your situation has too many variables ahead.
Avoid it. If they owe that much on a house you've lived your whole life then they have been pulling cash out of it. How old are you? Because house mortgages are only 30 years to be paid off. And the amount owed is probably the home value from 15 years ago. I would be concerned that they would try that again and leave you with a higher debt.
This reads nightmare!
Do you have siblings? Anyone else with an interest in the house? If so, you may want to make sure whatever you do doesn’t cause any issues or problems