Search found 18 matches

by ever1809
Wed Sep 12, 2018 10:06 pm
Forum: Personal Finance (Not Investing)
Topic: Father Wants a Home Mortgage (Bad Credit Score)
Replies: 43
Views: 4483

Re: Father Wants a Home Mortgage (Bad Credit Score)

Thank you to everyone who shared their input. Just to let everyone know that no additional advice is needed. My father successfully found a bank willing to do a mortgage.

The only condition was a 2.5% down payment plus closing costs to obtain a mortgage with an APR of 5%.

Because he didn’t have enough to cover the down payment and closing costs, I gave him a one-time gift to cover it. He told me he would pay me back with interest, and I told him he could do so in whatever he thought was a fair timeline and fair interest, but I’m treating it as if it’s purely a gift and expecting nothing in return.
by ever1809
Tue Sep 11, 2018 7:50 am
Forum: Personal Finance (Not Investing)
Topic: Father Wants a Home Mortgage (Bad Credit Score)
Replies: 43
Views: 4483

Re: Father Wants a Home Mortgage (Bad Credit Score)

Not to sound morbid, but given that you are an adult, I presume your grandfather is rather elderly. What are his prospects for still being around in 5 years? Do you have any idea who stands to inherit the house? Presumably not your father given the situation. How might other relatives who DO stand to inherit the house think of the situation? Another reason why it might not make sense to buy the house. He is in good health and will likely be around for a while. He's actually my father's step-dad and is married to my father's mom, who is also still alive. I have no idea, though, who would inherit the house should both pass away. In all likelihood, it probably would still go to my father, despite the situation. This will not end well. Why are...
by ever1809
Mon Sep 10, 2018 4:04 pm
Forum: Personal Finance (Not Investing)
Topic: Father Wants a Home Mortgage (Bad Credit Score)
Replies: 43
Views: 4483

Re: Father Wants a Home Mortgage (Bad Credit Score)

If grandfather was reporting this to the IRS (unlikely), he would have either reported this as rental income, or as an installment sale on form 6252. If he reported it as an installment sale, perhaps this could be used to show intent, even though there is no contract? I would consider turning the old man into the IRS. They might take interest. I'm under the impression he reported it as rental income, but I don't know that for sure. Unlike some others, I am not opposed to mixing family and money. But I do think you need to be very careful in working out all the details since the consequences of a bad outcome are so much greater than just the lost of funds. My concern for you is whether or not you know the full story. Your Dad has apparently...
by ever1809
Mon Sep 10, 2018 11:52 am
Forum: Personal Finance (Not Investing)
Topic: Father Wants a Home Mortgage (Bad Credit Score)
Replies: 43
Views: 4483

Re: Father Wants a Home Mortgage (Bad Credit Score)

Can your dad document that he paid rent? If so I would be very tempted to tell grandfather to go screw himself. I would continue paying "rent" but stop paying insurance and taxes. And inform grandfather you will see him in court. It is extremely difficult to evict a paying renter Ultimately your father will loose the house but it sure as heck bears paying for it 3 times! Since my father is essentially a month-to-month renter (there is no formal contract), I think my grandfather can evict him as long as he gives him ample notice (the notice states that my father would have to vacate by the end of the year, since my father had prepaid through the end of the year). The Friday deadline is simply for deciding on whether or not my fath...
by ever1809
Mon Sep 10, 2018 11:41 am
Forum: Personal Finance (Not Investing)
Topic: Father Wants a Home Mortgage (Bad Credit Score)
Replies: 43
Views: 4483

Re: Father Wants a Home Mortgage (Bad Credit Score)

If the home is valued around $130k, you and/or your father will not get a mortgage for $130k. Does he have 10% to put down and enough for closing costs? Tough scenario, no doubt. If you decide to co-sign and help with a downpayment/closing costs, be prepared to assume the full mortgage burden (now or future). Can your credit/finances support the full payment, taxes and insurance? If not, it is time for dad to move and rent. I would probably help him co-sign a rental agreement over getting a mortgage. He has been paying payments so has the ability to pay rent. Good luck! I'm not sure how much he can put down, if anything. It's possible he could swing a 10% down payment, though. My credit/finances could support everything without putting me ...
by ever1809
Mon Sep 10, 2018 10:42 am
Forum: Personal Finance (Not Investing)
Topic: Father Wants a Home Mortgage (Bad Credit Score)
Replies: 43
Views: 4483

Re: Father Wants a Home Mortgage (Bad Credit Score)

Your dad got into this situation through a problematic mix of finances and family. I'd hate to see the same sort of problems trickle down to another generation. Is $130k a reasonable market price for the home or is it below market? If it's market price, I think your father would be far better off buying another similar house without the complicated family baggage. If it's below market, that may help getting the loan as the creditor would be much better protected from default. Agreed. It's one of the reasons I decided not to loan to family members. As far as I know, $130k is a reasonable market price. That's what Zillow estimates the value is, though I don't know how accurate Zillow really is. I don't think he is opposed to buying another h...
by ever1809
Mon Sep 10, 2018 8:28 am
Forum: Personal Finance (Not Investing)
Topic: Father Wants a Home Mortgage (Bad Credit Score)
Replies: 43
Views: 4483

Father Wants a Home Mortgage (Bad Credit Score)

Backstory relevant to the situation: When my father faced his second divorce (my ex-step-mother), he had to fight a legal battle to retain the home he was raised in and lived in the majority of his life. Although he won the rights to the house, he owed her half the value of the home. He had a bad credit score and struggled to get a loan to give her that money. My grandfather offered my father a deal - he would buy the home from my father, enabling my father to give her the required money, and then let my father buy the house back. They had a gentlemen's agreement that my dad would make the payments of the mortgage to my grandfather (as well as property taxes and insurance), structured as a rent-to-own. That agreement seemed to be going smo...
by ever1809
Wed Aug 30, 2017 8:17 am
Forum: Investing - Theory, News & General
Topic: Adding to Emergency Fund
Replies: 8
Views: 1234

Re: Adding to Emergency Fund

Suppose that you have a fully funded emergency fund (i.e. 6 months of expenses) that realizes a negative real return. At what point do you add additional funds to keep it fully funded? What I do is I calculate the interest I make at the end of the year and then minus what I pay in taxes on said interest & and finally minus the average inflation rate for the whole year. I then put the difference back into my account so as to keep it fully funded. Below is an example. Emergency fund: $10,000 x 1% interest = $100 - 25% taxes = $75 also add say a 2% inflation rate. So I would need to add 1.25% to the account to keep it fully funded. Do you have a threshold at which point you don't worry about adding funds? If inflation rate for the year wa...
by ever1809
Wed Aug 30, 2017 7:35 am
Forum: Investing - Theory, News & General
Topic: Adding to Emergency Fund
Replies: 8
Views: 1234

Adding to Emergency Fund

Suppose that you have a fully funded emergency fund (i.e. 6 months of expenses) that realizes a negative real return. At what point do you add additional funds to keep it fully funded?
by ever1809
Fri May 05, 2017 2:36 pm
Forum: Personal Finance (Not Investing)
Topic: Fairness in College Savings
Replies: 47
Views: 4977

Re: Fairness in College Savings

Suppose that you're fortunate enough that you have extra cash beyond retirement funding or retirement needs, have no debt, and you'd like to save for college for your kids, grandkids, nieces, nephews, etc. In all likelihood, if there are multiple children you'd like to save for, they will be at different ages. As such, what do you think is the best method to be fair to each child? What if they don't all chose to go to college? If you have kids why are you paying for your nieces and nephews? I think this is horribly ill-advised , once you start these gifts you really can't stop without causing significant resentment. I say just either give them all a gift when they turn 24 or let your will take care of it. Unless you have a ton of money you...
by ever1809
Fri May 05, 2017 2:25 pm
Forum: Personal Finance (Not Investing)
Topic: Fairness in College Savings
Replies: 47
Views: 4977

Re: Fairness in College Savings

Suppose that you're fortunate enough that you have extra cash beyond retirement funding or retirement needs, have no debt, and you'd like to save for college for your kids, grandkids, nieces, nephews, etc. In all likelihood, if there are multiple children you'd like to save for, they will be at different ages. As such, what do you think is the best method to be fair to each child? Do you give gifts to your family members for their birthdays, holidays, etc.? If so, how do you decide how much to spend on each person? I give gifts worth a fixed dollar amount to my family members based on tiers of closeness. However, that's all in the same year. For college funding, one could argue that giving $1,000 to a niece in 2017 would not be equivalent ...
by ever1809
Fri May 05, 2017 2:17 pm
Forum: Personal Finance (Not Investing)
Topic: Fairness in College Savings
Replies: 47
Views: 4977

Re: Fairness in College Savings

Suppose that you're fortunate enough that you have extra cash beyond retirement funding or retirement needs, have no debt, and you'd like to save for college for your kids, grandkids, nieces, nephews, etc. In all likelihood, if there are multiple children you'd like to save for, they will be at different ages. As such, what do you think is the best method to be fair to each child? ever1809, 1) Why do you need to save for your children's college education? A) If your retirement is fully funded and you are rich enough, you can pay for your children's college with your annual income/saving. You can "cash flow" the college education. So, why do you need to save for college? B) If your retirement is not fully funded and you are not ri...
by ever1809
Fri May 05, 2017 11:50 am
Forum: Personal Finance (Not Investing)
Topic: Fairness in College Savings
Replies: 47
Views: 4977

Re: Fairness in College Savings

Suppose that you're fortunate enough that you have extra cash beyond retirement funding or retirement needs, have no debt, and you'd like to save for college for your kids, grandkids, nieces, nephews, etc. In all likelihood, if there are multiple children you'd like to save for, they will be at different ages. As such, what do you think is the best method to be fair to each child? What if they don't all chose to go to college? If you have kids why are you paying for your nieces and nephews? I think this is horribly ill-advised , once you start these gifts you really can't stop without causing significant resentment. I say just either give them all a gift when they turn 24 or let your will take care of it. Unless you have a ton of money you...
by ever1809
Fri May 05, 2017 10:46 am
Forum: Personal Finance (Not Investing)
Topic: Fairness in College Savings
Replies: 47
Views: 4977

Re: Fairness in College Savings

I'm paying for my first son's college. If or when my second kid goes to college, I'll pay for that. Beyond that, if the second one gets scholarships, goes to a cheaper school, etc, that's great, but I'm not planning to do anything beyond paying for their costs during school. No, I won't pay some difference in cash. It's my money (and my wife's) and the kids aren't entitled to it just because they exist. Sorry. What would your thoughts be if, hypothetically speaking, you decided not to pay for the full cost of college and simply give a smaller gift? Or if instead of your kids, you had nieces or nephews you wanted to save for? In my case, I have two kids and I am planning it as a certain amount per year that I will give to each of them as a ...
by ever1809
Fri May 05, 2017 10:27 am
Forum: Personal Investments
Topic: Birthday Rebalance - Quick Quesiton
Replies: 8
Views: 1128

Re: Birthday Rebalance - Quick Quesiton

If you follow the 5/25 rule for rebalancing, then this would be small enough of a deviation, rebalancing would not be necessary.
by ever1809
Fri May 05, 2017 10:21 am
Forum: Personal Finance (Not Investing)
Topic: Fairness in College Savings
Replies: 47
Views: 4977

Fairness in College Savings

Suppose that you're fortunate enough that you have extra cash beyond retirement funding or retirement needs, have no debt, and you'd like to save for college for your kids, grandkids, nieces, nephews, etc. In all likelihood, if there are multiple children you'd like to save for, they will be at different ages. As such, what do you think is the best method to be fair to each child?
by ever1809
Fri Apr 14, 2017 10:56 am
Forum: Personal Investments
Topic: Portfolio Thoughts
Replies: 2
Views: 476

Portfolio Thoughts

Hello all, I've lurked here the past couple of months soaking up information on the wiki and general posts. Although I've learned quite a bit, I'm fairly new to investing and am seeking general thoughts of my portfolio. Without any further ado, here is the recommended information per the "Asking Portfolio Questions" post. When you have researched your retirement plan options and have a list of your current investments, it is time to post. We do not need to know your name or the amount of money you have invested or anything else that will identify you. To help us help you please post in this format: Emergency Fund 1 month of expenses in my personal savings (tier I for quick liquidity; 0.05% interest) 11 months of expenses in Ally s...