Should I co-sign a house for my parents? Help!

I agree with IrvineRealtor. You should go check the situation out yourself if at all possible. Tell them you?re not comfortable in their decision to buy and explain why. Offer to help them find a new rental and help them with the move.
 
[quote author="no_vaseline" date=1257819368][quote author="CapitalismWorks" date=1257813417] If it were my parents, I would figure out a way to assist them. </blockquote>


There is a thin line between helping and enabling. Just sayin'.</blockquote>


Good point. You sound like a conservative...
 
[quote author="Cameray" date=1257821659]I agree with IrvineRealtor. You should go check the situation out yourself if at all possible. Tell them you?re not comfortable in their decision to buy and explain why. Offer to help them find a new rental and help them with the move.</blockquote>


Mrs. Nude said much the same thing. But she also said "pay for a rental if they need help in the short term, but there is no way that I am paying for my parent's screw ups".



So, in our house the Right says "help your family" and the Left says "suck it, losers"... so much for bleeding-heart Liberalism.
 
If it were me, i would take them in to live with me rent free. Seriously.. even for Asian parents, this too much to ask from their adult child. Never let anyone borrow your name or your credit. These are the rules i live by.
 
If you choose to help them buy a house, are you also prepared to pay the property taxes, insurance, HOAs and any and all kinds of maintenance problems that <em>will</em> arise? I've known more than one person who has thought he was helping a family member only to have the family member lose the house due to financial incompetence and irresponsibility.
 
[quote author="Nude" date=1257787104][quote author="Rookje" date=1257772563]What should I do?</blockquote>


The answer largely depends on whether you want to have a relationship with your parents or not. Sure, they put you in a tough spot, but I'm sure you put them in a tough spot, too back when you were growing up.



Anyway, here's the point: unless you've got a check ready to pay them off for all the money they spent raising you, refusing them help is akin to throwing them off a speeding train. I would get the loan in your name, and they can pay *you* until the foreclosure clears their credit history and you can sell it to them for the balance due. Co-signing is a bad compromise because it puts you on the hook but they get all the benefit. If you own the house, you hold the power and if they screw you over, you can sell the house out from under them with no regrets or guilt.</blockquote>


Agree with Nude for the first time.



It's a tough spot but it's family. I personally couldn't imagine letting the risk (not even guaranteed) of a decline in credit score stop me from helping my parents, even if I thought I knew what was best for them.
 
[quote author="Nude" date=1257824841][quote author="Cameray" date=1257821659]I agree with IrvineRealtor. You should go check the situation out yourself if at all possible. Tell them you?re not comfortable in their decision to buy and explain why. Offer to help them find a new rental and help them with the move.</blockquote>


Mrs. Nude said much the same thing. But she also said "pay for a rental if they need help in the short term, but there is no way that I am paying for my parent's screw ups".</blockquote>


FWIW we co-signed on a condo for my mother and loaned her 20k for the down payment. Instead of paying us back she used the money to buy herself new furniture! :lol:
 
[quote author="CapitalismWorks" date=1257822292][quote author="no_vaseline" date=1257819368][quote author="CapitalismWorks" date=1257813417] If it were my parents, I would figure out a way to assist them. </blockquote>


There is a thin line between helping and enabling. Just sayin'.</blockquote>


Good point. You sound like a conservative...</blockquote>


Funny. I have a friend of mine who is a college professor (and a registered Republican) who recently described me as "barely left - just barely".



Ever read "Grapes of Wrath"? That's my family on my father's side (I grew up about twenty minutes drive from the Tagus Ranch). Hey brother, can you spare a dime desperate. Breadlines. People starving. My Grandparents and two oldest Aunts among them. My grandfather (a New Deal Democrat Dust Bowl Okie if there ever was one) went from object poverty to a ridiculous amount of wealth in about 20 years, but he never forgot being poor and hungry. In the early '50s, he would often get panhandled by hobos, usually WWII GI's suffering from "Shell Shock" or whatever we used to call PTSD.



The bums would ask for money for food (they were obviously starving, but were also drunks) and my Granddad would tell them to hold up. He'd head over to the grocery store and buy a loafs of bread, a jar of peanut butter, a quart of milk (he carried a box of plastic picnic knifes in his pickup) and give it to the guy. If he gave them money, they'd just buy gin - he wasn't about to enable that habit, but he wasn't going to let them starve either. My dad said he'd do this to every hobo he met - sometimes 15 or 20 a week.



I often get panhandled at gas stations from people who ask for money. 80 year old women panhandling in front of a supermarket for groceries (gave her a $50) and 70 year old men asking for bus fair to get to the VA aren't usually angle shooting you (he was sober, at a bus stop, and I gave him every dime in my wallet), but kids in thier 20's are. Kids who are really in trouble do a bad job begging and never specifically ask for anything other than help getting home. I've bought many tanks of fuel over the years, but it has radically increased over the past several months (you can't readily trade gas for meth). The last one resulted in the girl exploding in tears after I gave her a tank of fuel, so beware if you try this at home.



Anyway, my opinion of the role of government differs very much from all the Republicans I know. Much like the ref in a basketball game (he's a pain in the ass, but you need him to keep the game square and fair), getting rid of the ref is no solution. The government has an obligation to keep the majority from taking advantage of the minority. And that is in direct conflict with Reagan and his ideals of "Government is always the problem and never the solution", so there you are.



And to go back to the topic so this isn't a total hijack, I think this is a hand-out rather than a hand-up. OP claims the 'rents saved $115K two years after bankruptcy on a small fixed income and a small job. This whole post doesn't pass the stink test, so it's is either the troll of the century or the 'rents should simply continue to rent and save (at that rate) for four more years and buy the damn house outright and leave the kids alone.



Hey Daddy Zoval and SoCal78, did I handle the troll okay this time?
 
[quote author="no_vaseline" date=1257828244]Anyway, my opinion of the role of government differs very much from all the Republicans I know. Much like the ref in a basketball game (he's a pain in the ass, but you need him to keep the game square and fair), getting rid of the ref is no solution. The government has an obligation to keep the majority from taking advantage of the minority. And that is in direct conflict with Reagan and his ideals of "Government is always the problem and never the solution", so there you are. </blockquote>


Just stop. Either you are completely and intentionally ignorant of the facts or you are trolling. In any case, take the time to educate yourself on both the context and the full meaning of his words rather than just the screed you've been swallowing:



<blockquote> These United States are confronted with an economic affliction of great proportions. We suffer from<strong> the longest and one of the worst sustained inflations in our national history</strong>. It distorts our economic decisions, penalizes thrift, and crushes the struggling young and the fixed-income elderly alike. It threatens to shatter the lives of millions of our people. <strong>Idle industries have cast workers into unemployment, human misery and personal indignity</strong>.



Those who do work are denied a fair return for their labor by a tax system which penalizes successful achievement and keeps us from maintaining full productivity. But great as our tax burden is, it has not kept pace with public spending. For decades we have piled deficit upon deficit, mortgaging our future and our children?s future for the temporary convenience of the present. To continue this long trend is to guarantee tremendous social, cultural, political, and economic upheavals.



You and I, as individuals, can, by borrowing, live beyond our means, but for only a limited period of time. Why then should we think that collectively, as a nation, we are not bound by that same limitation?



We must act today in order to preserve tomorrow. And let there be no misunderstanding -- we?re going to begin to act beginning today. The economic ills we suffer have come upon us over several decades. They will not go away in days, weeks, or months, but they will go away. They will go away because we as Americans have the capacity now, as we have had in the past, to do whatever needs to be done to preserve this last and greatest bastion of freedom.



<strong><em>In this present crisis</em>, government is not the solution to our problem; government is the problem.</strong> From time to time we?ve been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. But if no one among us is capable of governing himself, then who among us has the capacity to govern someone else?



All of us together -- in and out of government -- must bear the burden. The solutions we seek must be equitable with no one group singled out to pay a higher price. We hear much of special interest groups. Well our concern must be for a special interest group that has been too long neglected. It knows no sectional boundaries, or ethnic and racial divisions, and it crosses political party lines.<strong> It is made up of men and women who raise our food, patrol our streets, man our mines and factories, teach our children, keep our homes, and heal us when we?re sick -- professionals, industrialists, shopkeepers, clerks, cabbies, and truck drivers.</strong> They are, in short, ?We the People.? This breed called Americans.



Well,<strong> this Administration?s objective will be a healthy, vigorous, growing economy that provides equal opportunities for all Americans with no barriers born of bigotry or discrimination. Putting America back to work means putting all Americans back to work. Ending inflation means freeing all Americans from the terror of runaway living costs</strong>.



All must share in the productive work of this ?new beginning,? and all must share in the bounty of a revived economy.



With the idealism and fair play which are the core of our system and our strength, we can have a strong and prosperous America at peace with itself and the world. So as we begin, let us take inventory.



We are a nation that has a government -- not the other way around. And this makes us special among the nations of the earth. Our Government has no power except that granted it by the people. It is time to check and reverse the growth of government which shows signs of having grown beyond the consent of the governed.



It is my intention to curb the size and influence of the Federal establishment and to demand recognition of the distinction between the powers granted to the Federal Government and those reserved to the states or to the people.



All of us -- all of us need to be reminded that the Federal Government did not create the states; the states created the Federal Government.



Now, <strong>so there will be no misunderstanding, it?s not my intention to do away with government</strong>. It is rather to make it work -- work with us, not over us; to stand by our side, not ride on our back. <strong>Government can and must provide opportunity, not smother it; foster productivity, not stifle it.</strong> If we look to the answer as to why for so many years we achieved so much, prospered as no other people on earth, it was because here in this land we unleashed the energy and individual genius of man to a greater extent than has ever been done before.</blockquote>


Reagan wasn't against government, he was against government control of our lives. It was a Democrat who repealed Glass-Steagal and set this particular ball rolling, not Reagan. You have more in common with him than you think, if you stop and read what he actually wrote and said.
 
[quote author="Nude" date=1257787104][quote author="Rookje" date=1257772563]What should I do?</blockquote>


<strong>Anyway, here's the point: unless you've got a check ready to pay them off for all the money they spent raising you, refusing them help is akin to throwing them off a speeding train.</strong> </blockquote>


This is one of the dumbest things i have ever heard. Cut them a check for raising the son? It was their choice to bring him into this world and he should be prepared to cut them a check? Your suggestion was a good one (about buying the house and renting it to them), but this was just a ignorant statement.
 
[quote author="qwerty" date=1257830172][quote author="Nude" date=1257787104][quote author="Rookje" date=1257772563]What should I do?</blockquote>


<strong>Anyway, here's the point: unless you've got a check ready to pay them off for all the money they spent raising you, refusing them help is akin to throwing them off a speeding train.</strong> </blockquote>


This is one of the dumbest things i have ever heard. Cut them a check for raising the son? It was their choice to bring him into this world and he should be prepared to cut them a check? Your suggestion was a good one (about buying the house and renting it to them), but this was just a ignorant statement.</blockquote>


About as ignorant as calling their son and demanding he co-sign a mortgage. Besides, I was shooting for "absurd".
 
[quote author="no_vaseline" date=1257828244][quote author="CapitalismWorks" date=1257822292][quote author="no_vaseline" date=1257819368][quote author="CapitalismWorks" date=1257813417] If it were my parents, I would figure out a way to assist them. </blockquote>


There is a thin line between helping and enabling. Just sayin'.</blockquote>


Good point. You sound like a conservative...</blockquote>


Funny. I have a friend of mine who is a college professor (and a registered Republican) who recently described me as "barely left - just barely".



Ever read "Grapes of Wrath"? That's my family on my father's side (I grew up about twenty minutes drive from the Tagus Ranch). Hey brother, can you spare a dime desperate. Breadlines. People starving. My Grandparents and two oldest Aunts among them. My grandfather (a New Deal Democrat Dust Bowl Okie if there ever was one) went from object poverty to a ridiculous amount of wealth in about 20 years, but he never forgot being poor and hungry. In the early '50s, he would often get panhandled by hobos, usually WWII GI's suffering from "Shell Shock" or whatever we used to call PTSD.



The bums would ask for money for food (they were obviously starving, but were also drunks) and my Granddad would tell them to hold up. He'd head over to the grocery store and buy a loafs of bread, a jar of peanut butter, a quart of milk (he carried a box of plastic picnic knifes in his pickup) and give it to the guy. If he gave them money, they'd just buy gin - he wasn't about to enable that habit, but he wasn't going to let them starve either. My dad said he'd do this to every hobo he met - sometimes 15 or 20 a week.



I often get panhandled at gas stations from people who ask for money. 80 year old women panhandling in front of a supermarket for groceries (gave her a $50) and 70 year old men asking for bus fair to get to the VA aren't usually angle shooting you (he was sober, at a bus stop, and I gave him every dime in my wallet), but kids in thier 20's are. Kids who are really in trouble do a bad job begging and never specifically ask for anything other than help getting home. I've bought many tanks of fuel over the years, but it has radically increased over the past several months (you can't readily trade gas for meth). The last one resulted in the girl exploding in tears after I gave her a tank of fuel, so beware if you try this at home.



Anyway, my opinion of the role of government differs very much from all the Republicans I know. Much like the ref in a basketball game (he's a pain in the ass, but you need him to keep the game square and fair), getting rid of the ref is no solution. The government has an obligation to keep the majority from taking advantage of the minority. And that is in direct conflict with Reagan and his ideals of "Government is always the problem and never the solution", so there you are.



And to go back to the topic so this isn't a total hijack, I think this is a hand-out rather than a hand-up. OP claims the 'rents saved $115K two years after bankruptcy on a small fixed income and a small job. This whole post doesn't pass the stink test, so it's is either the troll of the century or the 'rents should simply continue to rent and save (at that rate) for four more years and buy the damn house outright and leave the kids alone.



Hey Daddy Zoval and SoCal78, did I handle the troll okay this time?</blockquote>


FTR, as my avatar mighy indicate, I am on the far right of the political spectrum (with strong libertarian ideals, though their lack of a foreign policy is a dealbreaker).



I also agree that the government roles is to protect majority from taking advantage of the minority, or even more importantly a powerful minority from taking control of the majority. Unfortunately, at least in my view, it appears that a number of minorities are taking advantage of the majority, or perhaps another minority, most often being "wealthy" people.



Regardless, my family shares tales of woe, though from the teutonic perspective. Southwest Germany pretty close to Hell on Earth preceding and during, and for a time WWII. My grandmother to this day demonstrates a work ethic and level of parsimony that is nothing short of remarkable (she also demonstrates a wariness of planes after beinf strafed countless times by Allied squadrons returning from bombing runs). Probably the most remarkable is the fact that regardless her level of income she has always been able to maintain very high savings rates.



Pertinent to this thread, my grandmother also demonstrates unfailing generosity towards her children and grandchildren, though not without strong expectations. She demands that her offspring share her attitudes towards thrift and investment, and would never support wayward children. This strings attached model of "giving" seems the correct model in this situation. As No Vas suggested, supporting wayward parents is completely out of the question, however setting up the transaction in such a way as to enforce behavioral improvement while limiting downside risk is critical. The key may be to recognize the exchange in roles between child and parent (this is not that uncommon), and set parameters to ensure mutual success (read: explicit written terms).



I believe it is a duty to care for wealth. You will one day have your own wife and children for which to care. I would assume you hope to avoid looking back on this decision as one that impaired your ability to give them and yourself the life you deserve.
 
[quote author="Nude" date=1257830139]



Reagan wasn't against government, he was against government control of our lives. It was a Democrat who repealed Glass-Steagal and set this particular ball rolling, not Reagan. You have more in common with him than you think, if you stop and read what he actually wrote and said.</blockquote>




Tell us another story, uncle Rhemus!
 
[quote author="freedomCM" date=1257838116][quote author="Nude" date=1257830139]



Reagan wasn't against government, he was against government control of our lives. It was a Democrat who repealed Glass-Steagal and set this particular ball rolling, not Reagan. You have more in common with him than you think, if you stop and read what he actually wrote and said.</blockquote>




Tell us another story, uncle Rhemus!</blockquote>


Are you calling me a liar, sir?
 
This is not a troll post (I wish it were).



The $115K is what they've saved up from the pension + the up front retirement money my dad got when he retired (I'm not super in on the details, my parents will tell me the least about their finances as possible). He retired early because he was ill (he has diabetes, and worked in a construction/physical-esque job so it was physically demanding on him with the illness), and he also felt he had to do it during the foreclosure in order to afford a new rental (reboot his financial life, as it were). I very much disagreed with that, because I felt he was too young to retire and that they could definitely not live off his pension alone for the remainder of their lives. They've lived paycheck-to-paycheck for years, and were floating on credit.



After my Dad's retirement, the pension was a lot more reliable income and since my brother and I have moved out their cost of living has gone down.



They don't want to rent because they feel they've "wasted" $55K or however much they've put into the renting the current home they're being moved out of. BTW, they made all payments on time and in full for the rental. They're being moved out because they were (stupidly) paying month-to-month with no lease, so he was free to kick them out whenever. The owner of the rental has financial issues himself (he went through a messy divorce, lost his job, is working two jobs and living in an apartment to make means).



Anyways, the foreclosure two years ago was a very emotional draining experience for me (I'm sure there are many other young people like me who had to go through the same thing, I feel for them). I had to basically explain to them that YES, this house is now lost and we have to move out. I got them the new rental, had them pay off all bills and lines of credit with my Dad's retirement and stressed to them to pay that rent on time every month. So far they have, to my knowledge.



It all seems like part 2 of the saga now, and the ball is totally in my court for what to do. Everytime I talk to them on the phone I start to sympathize, and think "Meh maybe it won't be so bad" but everyone here seems to disagree. They feel I'm being selfish, and all it takes is a signature to make things good again.



I'm going to try to convince them to rent again, but it's not going to be easy. Sigh.
 
[quote author="freedomCM" date=1257838116][quote author="Nude" date=1257830139]



Reagan wasn't against government, he was against government control of our lives. It was a Democrat who repealed Glass-Steagal and set this particular ball rolling, not Reagan. You have more in common with him than you think, if you stop and read what he actually wrote and said.</blockquote>




Tell us another story, uncle Rhemus!</blockquote>


It was Clinton, Rubin, Greenspan, and Summers who decided to repeal Glass-Stegal and got it repealed. One of Obama's most trusted economic advisers is Summers. It is not a story. It is fact.
 
The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (Republican of Texas) and in the House of Representatives by Jim Leach (R-Iowa) in 1999. The bills were passed by a Republican majority, basically following party lines by a 54-44 vote in the Senate[12]
 
[quote author="freedomCM" date=1257850149]The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (Republican of Texas) and in the House of Representatives by Jim Leach (R-Iowa) in 1999. The bills were passed by a Republican majority, basically following party lines by a 54-44 vote in the Senate[12]</blockquote>


Totally true. However, if you want to blame the congressional Republicans for that, then by that same logic we need to blame the congressional Democrats for the financial crisis, every single budget deficit since Truman was President, and every war we've fought since WW2 as the Democrats controlled Congress for all of it.



So which is it? Was Clinton a rubberstamp for the GOP between 1995 and 2001 or does the President ultimately hold the veto power, and therefore the responsibility?
 
[quote author="Rookje" date=1257844380]I'm going to try to convince them to rent again, but it's not going to be easy. Sigh.</blockquote>


I feel for you. It's hard to realize that who you are conflicts with who your parents think you are; some people never stand up for themselves, allowing their parents to treasure their misconceptions. My only advice is to forget the guilt trips and expectations and treat them like the bank they are asking you to be: are they worth the credit risk?
 
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