It depends on the interest rate on the current loans and the new wicked low interest rate. The $8k will help too. Plus you should have some cash left over to make payments for a while. I think the math will work out for you and your family.

Anything you can do to lower the interest rate will put you in a better position. Sure the house is more than you can afford, but you have a good renter. As long as your Mom is still paying rent you deduct that from your rent obligation.

The math works for me.

 

Here is the thing. You and YOU alone are on the hook for this if the bank refuses to allow your mom to sign. So what will happen if you can't afford a payment? You are the one responsible. I would rather have my mother move elsewhere than to take on that financial issue. You are potentially screwing yourself over for the rest of your life.

 

Also are you figuring in closing fee`s, my closing fee`s were a little over 10k 6 years ago.

 

Buying a home with anyone except a wife should be a no-no.

Parents should be teaching kids, If your parents have'nt learned how to manage finances by now then there's little hope for them. In this situation your just setting yourself up for hardship.

 

I don't know how it works in the US but here I would consolidate those two loans into a new mortgage loan. With interest rates what they are now even with the penalties for refinancing those loans early you should nearly break even. Your mom should easily be able to afford the payments and then you won't have to live with your mom forever.

 

I would look into this first. Why pay all that interest all over again on a new mortgage.

My wife's parents are the poster people for bad money decisions. Divorced after 34 years of marriage and both filed for banktrupcy at age 62. Not a pot to pee in after all this time. My mother-in-law lives alone in a crappy apartment. Guess who's helping with her bills.

 

I agree with everyone who says that this is a bad idea. The only way I would agree with you in this sit. is if your father had built the house or something and it would mean alot to you down the road as well (Or if the property is in a "growth" area and you believe the value to be substantially higher within say 3 years of the US getting out of the slump {God Willing}).

Do you really see yourself living in this house for 30+ straight years? If your doing this "as a favor" or "because you can", DONT. Their situation may NOT be due to financial irresponsibility. I've read your other thread. But you must have your life as well and you dont want to put yourself in a touchy situation that may affect your kids.

 

We are going to refi, as according to a few loan officers, we've got plenty of equity in the house, it would be stupid to give it up.

Thanks fellas.

 

Probably the best bet... also, keep in mind that the $8k is a tax credit; not an instantaneous 'credit' knocked off of the negotiated price of the house. In short, you won't see the $8k until about this time next year if you were to jump on it and ride it like a llama right now.

 

Well, I've talked to numerous banks and loan officers, and all of them had nothing but positive answers. Not to mention very good ways of taking care of the debt.

They are going to send out an appraiser sometime next week.

From the looks of the math that the loan officers drew up, man, it's a deal. Even if I have to live with it for 30 years.

 

I think home values have pretty much bottomed out - look at it as an investment for the future.

 

Keep in mind the people you are talking to get paid on commission.

IMO, it MIGHT be wise for you to do this, but there are multiple factors at work. What are the fees? How much of the fees do you pay up front, and how much get rolled into the loan? How much lower is the interest rate? How long (honestly) do you think you will live in/pay for the house?

 

Every market is different. We are down over 50% in my market and there is very good evidence that it has not bottomed out.

 

I'm getting a good deal... not to mention, our high credit scores helped get us a great loan.

We aren't worried about the closing costs or anything, as after all the dust settles, we will actually have money from our paychecks going into our pockets rather than the banks, plus only one credit card and that is it. I told my mom, since I am being nice enough to do this, as I will be monitoring everything that she buys and any large purchases will be screen through me first.

I'm a natural tight wad, and I'm proud of it. (Except for the stack project... learned from that one! :o)

But we are better off now that we have ever been.

 

Just as an update, I've been pre-approved for the loan, and an appraiser is coming out Thursday!

Yay! My first house!!!