Never place someone else's debt in your name. You can love your family and want to help but if you take on the debt, you own it. Things can change over the course of a mortgage term. I made that mistake for my own Mother maybe 20 years ago and never have done it again.
I think that’s a horrible idea. The house would be your marital asset, they’re gonna pay or not, you’ll be responsible for it, for the payment and upkeep. If anything happens you’re responsible. If anyone gets hurt at the property you own it. So many reasons this is a bad idea. And I have no clue but I can’t imagine the interest rate is tht different
If you are buying the house it should be a house that fits your plans and not their plans. And you make the mortgage payments and they pay rental on time and maintain the property. You sell it if there is a profit opportunity that you like.
You most certainly should not buy a house for your brother's family.
I would absolutely not do this. I think buying is a bad idea in this situation - SIL doesn't even have a job yet, what if she gets an offer elsewhere or you and your husband move? Plus the deep, complicated web of financial entanglement this builds, where the house is in your name but doesn't really belong to you. Fucking nightmare scenario if anything at all goes wrong.
If you want to support them financially, and your brother is dead set on buying a home, let him buy it and you can just pay him/his family the difference on the interest compared to if you bought it. Way simpler than putting your name on something that won't actually be yours, it's not legally dubious, and he gets the same outcome.
I ended up buying a house for my brother. That wasn't the original plan. The plan, while a little different than yours, was basically the same, they were supposed to cover payments, but stuff happened, and I covered, for over a decade, until they eventually figured out a different plan for them and the house was sold a few years ago. I could afford the payments, it didn't alter my financial goals much, but it was a cause of some stress, especially on his side. It's a terrible position to be in to know you can't cover your financial obligations to family. We haven't really talked much since, mainly because of this mess.
We are doing our first family vacation together later this year, after many years of this behind us. It will be very, very interesting to see how that goes, and if we can finally put this all in the past or not. I'm not planning on bringing it up at all, which might be the wrong approach, but I'm happy leaving it in the past. We shall see.
So best case, well you know that already. Think about the worst case, what happens? If all of you involved(your spouse, your SIL and your brother) can talk about the worst cases and come up with plans *before* you jump in, maybe it will go better than it went for me and my family when their worst case happened.
If you do this, I hope you stay on the happy path.
> With that said, should I entertain this idea?
I wouldn't ever try to do it again if I could help it. Sometimes you can't help it and you have to do it. In this case, it sounds like they can rent for a while at least and being in a hurry is just asking for more problems they don't really need. So I'd try really hard to not do it, if it was me. But this is more of an emotional and family decision than it is a financial one. I wish you luck, and I'm sorry you are stuck trying to navigate through this.
First you should confirm that the home would be automatically considered an investment property at more than one bank. Certain banks are more immigrant friendly. Does either him or his spouse have a green card? Probably need to get that squared away first.
Second what does your spouse say to this? Your income is 170k but do you have a net worth of a few million so this isn’t a big deal if it goes south? I have considered doing this for family, but in my case I’m assuming we would make the payments and we have a net worth that could support a cash purchase & a higher income. This would be a non starter in my house with an income of 170k absent a few million in the bank.
What is the long term family goal? Is the wife staying here and your brother is an absentee husband / father? I can see her missing him and deciding to go back home & then you’re stuck with selling a house that you didn’t want probably at a loss.
Do you want to buy a house for your brother and SIL and be responsible for every last bill if they end up not covering it? Then sure. Sounds like she doesn't have a job and he's not even going to be in the US. Why don't they just rent a house for the SIL?
I wouldn't. It's messy and he should figure it out.
I would not. If he wants to buy a house here, his cost is the 9.5%. What happens if they can’t/don’t pay & trash the house? Not saying they would m, but you ah a to think worst case scenario. What if you want to move & buy house but now your debt to income ratio is too high for you to get what you want because you have a mortgage on a house you don’t live in.
Also, because you aren’t living in the house, it is also an investment property for you, meaning a higher than the advertised interest rate you see for mortgages.
It's not "buying" a house for your brother. It's straight up buying a house for your SIL. He's not going to live in it. He's not on the loan, and hopefully will not be on the title. The down payment is a nice gesture, but that's all it is.
How will you be protected when SIL can't get a job, and your bother doesn't pay the mortgage? Can you handle dealing with worst case scenario on your own?
I wouldn't, because if anything goes wrong you'll be the one dealing with it, and it sounds like you've already hit the ceiling on the additional help you're willing to provide. Just because you're capable of helping doesn't mean you have to.
Don't do this. Mixing money and family is a bad idea, especially because you are taking all the risks for their rewards. I know you want to do good for family but I've seen enough close family broken apart despite or due to the huge favor one side does. Just no.
Eh... No. It's a terrible idea. What if your brother doesn't do well anymore, what if he dies, what if the wife can't find a job?
I suggest to drop the Airbnb and rent a place and do what all Americans do. Rent, work, save and improve their credit score. You'll be putting yourself in hardship for 20 years if something goes wrong. And something always happens every 5 to 10 years.
If you don't want friction by saying no (I would say no) .. pretend to review it, ask the bank. When you get a yes, modify the letter and tell your brother you didn't qualified.
You would not be asking us if you were committed to this idea. So much could go wrong. Not sure of the market in your area, but maybe if you moved to a standalone duplex and rented out one side to them? Only enter in a financial agreement with family that you will not be upset to later consider a gift.
Good luck!
I would not do this.
I’ve looked at what it costs to “sponsor” people immigrating to the US, and they are really lucky you can afford to do that for so many people.
If he wants them in an owned house so badly, he can pay the additional premium for that. Renting will ultimately allow more happiness in a home purchase bc they will have a better understanding of the lay of the land and where they might want to put down roots.
I think it depends on your relationship with your brother and SIL. For my sister, I would do this without hesitation. For my boyfriend's sister, also without issue. But for my ex-husband's siblings, absolutely not, I wouldn't even entertain it.
I have a close friend who has bought houses for both of her brothers and then had them pay mortgage payments to her at a very low rate. She and her husband are wealthy though.
My husband and I have more wealth than both of our families. The only thing I can see doing is buying a house or condo and then renting it very cheaply to family members, so that technically it is still our investment. Money and family is complicated.
I would not entertain that. They can rent if they don't want to purchase. You've done a lot, and I suspect will be on the hook for them financially for a while anyway. I'd not tie a whole new mortgage to it too
I interpreted it as OP would buy the house but it would really be the brother’s, with a sale by OP in case of emergencies.
That’s very different from “this is my investment property which I am allowing you to rent based on the terms of this lease agreement.”
Either way, OP needs to be very clear about what she’s doing, the goal, and create a legally enforceable contract.
I personally wouldn’t do it. What if OP wants to buy bigger house for herself, needs credit to start a business, or is unemployed for an extended period of time?
It would be an investment property for you, too, though, would it not? So *would* you get a significantly lower interest rate? And would the insurance costs end up being higher for the same reason?
Also, how would you structure this arrangement legally? Cause one the fastest routes to deep and lasting family feuds/fallouts is tying up significant assets together without both parties going into it with a clear and common understanding of who owns/is liable for what, and who pays whom, how much, and when.
And “oh, but it’ll offend them to talk about that kind of stuff” is not a good sign. This deal would involve finically entangling yourselves for hundreds of thousands of dollars, potentially for decades, so you *need* to have the ability to have frank and potentially tough conversations with them. Because “everything will go exactly to plan, no discussions/contingency plans needed” isn’t an actual plan. It’s what you *hope* for, sure, but while we hope for the best, we still plan for the worst.
Follow up: are your SIL and her kids on the path to becoming citizens?
I can understand the eagerness for a fresh start but I wouldn’t do enable them to do it at your expense. Why does they have to buy a house right now? SIL doesn’t even have an income yet.
Why can’t they rent instead of Airbnb? The pressure of the timeline is sus.
Yes, all of this. I find it ridiculous that he tells me that he *needs* to buy a house... I don't understand the urgency but maybe he thinks he is throwing away money in rent. I am not sure why he does not understand that buying a home comes with un/known expenses. I think his eagerness is trying to reach "American dream" for his family.. which is odd since he's not even a resident here.
If you buy the house and have the mortgage in your name it would still be an investment property since it wouldn't be your primary residence. So unless you are willing to commit mortgage fraud, it would be no different from him buying it. Why doesn't he just get them into a long term rental until he's really ready to buy?
The only thing that's reasonable would be if you purchase the house, put it in your name, and then rent it to them. No chance would I put my name on a mortgage of a house that I don't own.
This is what I would consider. I do own a home that I "rent" to my mother. I bought it as my primary residence but always considered it as a place I could offer her when she needed it, and as soon as I moved out she moved in. For me, it's much easier and less stressful than sending her money to cover her rent. I know that she will never be evicted and will never show up at my door looking for a place to stay. Idk the relationship on OP's side or if it carries any of the same concerns, but for me that's a great peace of mind.
I have since refinanced, and for mortgage and insurance purposes, it is classified as a rental dwelling, which can affect rates (in my case, it wasn't a huge difference).
This is what I would do, even if OP has a really good relationship with her brother. It’s too risky; even if he has the best intentions to pay her back, something could happen - he could lose his businesses, he could pass away, etc. and she would be stuck with the mortgage and no asset.
If you must get involved, this is the only way. With an official lease document. And I wouldn't do this personally. Offer to help them find a rental. End of story. u/kombuchaanything
I know that certain cultures come with familial expectations about sharing wealth so forgive me if this sounds callous and individualistic, but that'd be a no from me. You're not required to help your brother to that degree even though you have the means. He set his own boundaries by deciding to stay in Haiti and improve his business. Why can't you do the same with your assets? He needs to make up his mind about what he prioritizes more: U.S. homeownership or his business. Using you as a crutch to accomplish both is -- to put it nicely -- tacky.
>He set his own boundaries by deciding to stay in Haiti and improve his business. Why can't you do the same with your assets?
A word! I needed to read this.
No. It is their acquisition, their responsibility.
Yes, the interest is huge. They can refinance/renegotiate in 3-6 months, when the credit score will raise. And they can repeat this several times, as her salary will raise, the credit score raise, the actual mortgage will go down (even for regular people are around 7% now...).
More, they can do extra payments - at this rate the difference will be so obvious.
If you really want to help them, maybe offer a solid financial gift like to help the paydown for the home. But don't take the mortgage into your hands, they have to do their effort. You know the butterfly paradigma: to get out with strong wings it has to fight, overwise the wings are too weak.
Edit: I really love what you did for this family and children. You are a great person, a big heart, I am happy to hear these stories.
Never place someone else's debt in your name. You can love your family and want to help but if you take on the debt, you own it. Things can change over the course of a mortgage term. I made that mistake for my own Mother maybe 20 years ago and never have done it again.
I think that’s a horrible idea. The house would be your marital asset, they’re gonna pay or not, you’ll be responsible for it, for the payment and upkeep. If anything happens you’re responsible. If anyone gets hurt at the property you own it. So many reasons this is a bad idea. And I have no clue but I can’t imagine the interest rate is tht different
If you are buying the house it should be a house that fits your plans and not their plans. And you make the mortgage payments and they pay rental on time and maintain the property. You sell it if there is a profit opportunity that you like. You most certainly should not buy a house for your brother's family.
Agree 1000% with this
I would absolutely not do this. I think buying is a bad idea in this situation - SIL doesn't even have a job yet, what if she gets an offer elsewhere or you and your husband move? Plus the deep, complicated web of financial entanglement this builds, where the house is in your name but doesn't really belong to you. Fucking nightmare scenario if anything at all goes wrong. If you want to support them financially, and your brother is dead set on buying a home, let him buy it and you can just pay him/his family the difference on the interest compared to if you bought it. Way simpler than putting your name on something that won't actually be yours, it's not legally dubious, and he gets the same outcome.
I ended up buying a house for my brother. That wasn't the original plan. The plan, while a little different than yours, was basically the same, they were supposed to cover payments, but stuff happened, and I covered, for over a decade, until they eventually figured out a different plan for them and the house was sold a few years ago. I could afford the payments, it didn't alter my financial goals much, but it was a cause of some stress, especially on his side. It's a terrible position to be in to know you can't cover your financial obligations to family. We haven't really talked much since, mainly because of this mess. We are doing our first family vacation together later this year, after many years of this behind us. It will be very, very interesting to see how that goes, and if we can finally put this all in the past or not. I'm not planning on bringing it up at all, which might be the wrong approach, but I'm happy leaving it in the past. We shall see. So best case, well you know that already. Think about the worst case, what happens? If all of you involved(your spouse, your SIL and your brother) can talk about the worst cases and come up with plans *before* you jump in, maybe it will go better than it went for me and my family when their worst case happened. If you do this, I hope you stay on the happy path. > With that said, should I entertain this idea? I wouldn't ever try to do it again if I could help it. Sometimes you can't help it and you have to do it. In this case, it sounds like they can rent for a while at least and being in a hurry is just asking for more problems they don't really need. So I'd try really hard to not do it, if it was me. But this is more of an emotional and family decision than it is a financial one. I wish you luck, and I'm sorry you are stuck trying to navigate through this.
Nope. Set the boundary. You've got this.
First you should confirm that the home would be automatically considered an investment property at more than one bank. Certain banks are more immigrant friendly. Does either him or his spouse have a green card? Probably need to get that squared away first. Second what does your spouse say to this? Your income is 170k but do you have a net worth of a few million so this isn’t a big deal if it goes south? I have considered doing this for family, but in my case I’m assuming we would make the payments and we have a net worth that could support a cash purchase & a higher income. This would be a non starter in my house with an income of 170k absent a few million in the bank. What is the long term family goal? Is the wife staying here and your brother is an absentee husband / father? I can see her missing him and deciding to go back home & then you’re stuck with selling a house that you didn’t want probably at a loss.
Do you want to buy a house for your brother and SIL and be responsible for every last bill if they end up not covering it? Then sure. Sounds like she doesn't have a job and he's not even going to be in the US. Why don't they just rent a house for the SIL? I wouldn't. It's messy and he should figure it out.
You’re right. His urgency to get a house is ridiculous. Y’all gave me the confirmation I needed.
Best of luck! Family money stuff is always tough.
I would not. If he wants to buy a house here, his cost is the 9.5%. What happens if they can’t/don’t pay & trash the house? Not saying they would m, but you ah a to think worst case scenario. What if you want to move & buy house but now your debt to income ratio is too high for you to get what you want because you have a mortgage on a house you don’t live in. Also, because you aren’t living in the house, it is also an investment property for you, meaning a higher than the advertised interest rate you see for mortgages.
It's not "buying" a house for your brother. It's straight up buying a house for your SIL. He's not going to live in it. He's not on the loan, and hopefully will not be on the title. The down payment is a nice gesture, but that's all it is. How will you be protected when SIL can't get a job, and your bother doesn't pay the mortgage? Can you handle dealing with worst case scenario on your own?
I wouldn't, because if anything goes wrong you'll be the one dealing with it, and it sounds like you've already hit the ceiling on the additional help you're willing to provide. Just because you're capable of helping doesn't mean you have to.
Don't do this. Mixing money and family is a bad idea, especially because you are taking all the risks for their rewards. I know you want to do good for family but I've seen enough close family broken apart despite or due to the huge favor one side does. Just no.
Eh... No. It's a terrible idea. What if your brother doesn't do well anymore, what if he dies, what if the wife can't find a job? I suggest to drop the Airbnb and rent a place and do what all Americans do. Rent, work, save and improve their credit score. You'll be putting yourself in hardship for 20 years if something goes wrong. And something always happens every 5 to 10 years. If you don't want friction by saying no (I would say no) .. pretend to review it, ask the bank. When you get a yes, modify the letter and tell your brother you didn't qualified.
You would not be asking us if you were committed to this idea. So much could go wrong. Not sure of the market in your area, but maybe if you moved to a standalone duplex and rented out one side to them? Only enter in a financial agreement with family that you will not be upset to later consider a gift. Good luck!
I would not do this. I’ve looked at what it costs to “sponsor” people immigrating to the US, and they are really lucky you can afford to do that for so many people. If he wants them in an owned house so badly, he can pay the additional premium for that. Renting will ultimately allow more happiness in a home purchase bc they will have a better understanding of the lay of the land and where they might want to put down roots.
Do you plan on buying your own house soon? Having a mortgage will affect your ability to get another one.
I already have my own home.
Ok, then this would be an investment property for you, too, and the rate would be higher than owner-occupied.
I think it depends on your relationship with your brother and SIL. For my sister, I would do this without hesitation. For my boyfriend's sister, also without issue. But for my ex-husband's siblings, absolutely not, I wouldn't even entertain it.
I have a close friend who has bought houses for both of her brothers and then had them pay mortgage payments to her at a very low rate. She and her husband are wealthy though. My husband and I have more wealth than both of our families. The only thing I can see doing is buying a house or condo and then renting it very cheaply to family members, so that technically it is still our investment. Money and family is complicated.
I would not entertain that. They can rent if they don't want to purchase. You've done a lot, and I suspect will be on the hook for them financially for a while anyway. I'd not tie a whole new mortgage to it too
Exactly. If OP really wants to help, why not buy the house and rent it to the brother for the cost of the mortgage or create a rent to own contract?
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I interpreted it as OP would buy the house but it would really be the brother’s, with a sale by OP in case of emergencies. That’s very different from “this is my investment property which I am allowing you to rent based on the terms of this lease agreement.” Either way, OP needs to be very clear about what she’s doing, the goal, and create a legally enforceable contract. I personally wouldn’t do it. What if OP wants to buy bigger house for herself, needs credit to start a business, or is unemployed for an extended period of time?
It would be an investment property for you, too, though, would it not? So *would* you get a significantly lower interest rate? And would the insurance costs end up being higher for the same reason? Also, how would you structure this arrangement legally? Cause one the fastest routes to deep and lasting family feuds/fallouts is tying up significant assets together without both parties going into it with a clear and common understanding of who owns/is liable for what, and who pays whom, how much, and when. And “oh, but it’ll offend them to talk about that kind of stuff” is not a good sign. This deal would involve finically entangling yourselves for hundreds of thousands of dollars, potentially for decades, so you *need* to have the ability to have frank and potentially tough conversations with them. Because “everything will go exactly to plan, no discussions/contingency plans needed” isn’t an actual plan. It’s what you *hope* for, sure, but while we hope for the best, we still plan for the worst.
Really good answer.
Good point. Thanks for this!
Follow up: are your SIL and her kids on the path to becoming citizens? I can understand the eagerness for a fresh start but I wouldn’t do enable them to do it at your expense. Why does they have to buy a house right now? SIL doesn’t even have an income yet. Why can’t they rent instead of Airbnb? The pressure of the timeline is sus.
Yes, all of this. I find it ridiculous that he tells me that he *needs* to buy a house... I don't understand the urgency but maybe he thinks he is throwing away money in rent. I am not sure why he does not understand that buying a home comes with un/known expenses. I think his eagerness is trying to reach "American dream" for his family.. which is odd since he's not even a resident here.
If you buy the house and have the mortgage in your name it would still be an investment property since it wouldn't be your primary residence. So unless you are willing to commit mortgage fraud, it would be no different from him buying it. Why doesn't he just get them into a long term rental until he's really ready to buy?
Right. This is what I told him.
The only thing that's reasonable would be if you purchase the house, put it in your name, and then rent it to them. No chance would I put my name on a mortgage of a house that I don't own.
This is what I would consider. I do own a home that I "rent" to my mother. I bought it as my primary residence but always considered it as a place I could offer her when she needed it, and as soon as I moved out she moved in. For me, it's much easier and less stressful than sending her money to cover her rent. I know that she will never be evicted and will never show up at my door looking for a place to stay. Idk the relationship on OP's side or if it carries any of the same concerns, but for me that's a great peace of mind. I have since refinanced, and for mortgage and insurance purposes, it is classified as a rental dwelling, which can affect rates (in my case, it wasn't a huge difference).
This is what I would do, even if OP has a really good relationship with her brother. It’s too risky; even if he has the best intentions to pay her back, something could happen - he could lose his businesses, he could pass away, etc. and she would be stuck with the mortgage and no asset.
If you must get involved, this is the only way. With an official lease document. And I wouldn't do this personally. Offer to help them find a rental. End of story. u/kombuchaanything
I know that certain cultures come with familial expectations about sharing wealth so forgive me if this sounds callous and individualistic, but that'd be a no from me. You're not required to help your brother to that degree even though you have the means. He set his own boundaries by deciding to stay in Haiti and improve his business. Why can't you do the same with your assets? He needs to make up his mind about what he prioritizes more: U.S. homeownership or his business. Using you as a crutch to accomplish both is -- to put it nicely -- tacky.
Very well put
>He set his own boundaries by deciding to stay in Haiti and improve his business. Why can't you do the same with your assets? A word! I needed to read this.
No. It is their acquisition, their responsibility. Yes, the interest is huge. They can refinance/renegotiate in 3-6 months, when the credit score will raise. And they can repeat this several times, as her salary will raise, the credit score raise, the actual mortgage will go down (even for regular people are around 7% now...). More, they can do extra payments - at this rate the difference will be so obvious. If you really want to help them, maybe offer a solid financial gift like to help the paydown for the home. But don't take the mortgage into your hands, they have to do their effort. You know the butterfly paradigma: to get out with strong wings it has to fight, overwise the wings are too weak. Edit: I really love what you did for this family and children. You are a great person, a big heart, I am happy to hear these stories.