Getting mortgage for son with bad credit

lola1123

Hello,

I'm new here. I'm 54 and have a son age 30. He's single, has less than good credit, and wants to buy his first home since it's a buyer's market right now. His father (my ex husband) has given him money for a down payment for a house.

I am married (not so happily...may be heading for divorce) and have excellent credit. My son asked me on his birthday if I would be willing to take out a mortgage on his behalf for a 2-family home. He would contribute the down payment, his name would be on the title with mine, he would pay the mortgage payments and everything associated with the house. Then, in about 2 years when his credit is "fixed," I would refinance and he would take over the mortgage in his own name. I'd be out of the deal.

Although I've agreed to this, I'm getting cold feet. The homes in our area are expensive: about $300K+. When I tried to back out, he got angry at first and tried to put a guilt trip on me. Then he settled down, apologized, and we moved on.

I told my son that the only way I'd do this is if he had several months' mortgage payments in an acccount in both our names, and that I would pay the mortgage each month (not contribute the money but physically write the check so that I know it's been paid.) I don't want late payments to destroy my good credit that I've worked so hard to build all these years.

My family thinks this is a bad idea; so does my husband. I'm not sure why I've agreed to do this. I want to help but feel that this is asking too much. Your thoughts are appreciated.

Lola

Incisor

lola1123 wrote: »

... I'm 54 and have a son age 30. He's single, has less than good credit, and wants to buy his first home since it's a buyer's market right now. His father (my ex husband) has given him money for a down payment for a house.

I am married (not so happily...may be heading for divorce) and have excellent credit. My son asked me on his birthday if I would be willing to take out a mortgage on his behalf for a 2-family home. He would contribute the down payment, his name would be on the title with mine, he would pay the mortgage payments and everything associated with the house. Then, in about 2 years when his credit is "fixed," I would refinance and he would take over the mortgage in his own name. I'd be out of the deal.

So what is wrong with him waiting 2 years to fix his credit? House prices won't go up in that period. What's wrong of course is that he will probably have another credit accident.

Although I've agreed to this, I'm getting cold feet. The homes in our area are expensive: about $300K+. When I tried to back out, he got angry at first and tried to put a guilt trip on me. Then he settled down, apologized, and we moved on.

Don't you smell trouble? He is not mature enough to know that owning your own house is not a right

I told my son that the only way I'd do this is if he had several months' mortgage payments in an account in both our names, and that I would pay the mortgage each month (not contribute the money but physically write the check so that I know it's been paid.) I don't want late payments to destroy my good credit that I've worked so hard to build all these years.

Even that arrangement can go very wrong quite quickly - if the account is in both your names, he can empty it as soon as he has some other crisis

My family thinks this is a bad idea; so does my husband. I'm not sure why I've agreed to do this. I want to help but feel that this is asking too much.

Go with what you feel. Nobody here will tell you any different and your family are saying the same thing.

lola1123

Thanks, Incisor, for weighing in. Everything you said is right on. My issue is this: my word is everything to me. I made my mistake when I "agreed" on his birthday to do this without thinking it through. He said, "Are you sure?" And I said, "Yes" and we shook on it. So I feel as though I haven't kept my word, and he is taking full advantage of my weakness. It hurts as a mother to think that my son is being manipulative. When I first told him that I changed my mind, he said, "I knew you'd back down. If you asked me to do this for you, I'd do it. But you can't do this for me." I was crushed.... I then told him that I shouldn't have to "buy his love." And that's when he settled down and apologized.

I've got to have another conversation about this. Thanks for the support.

Incisor

Hmm. Shook on it? I can see your dilemma. Has he incurred any loss [mortgage fees etc]? You should put that sort of issue right. Be straight with him, you are sorry to let him down, but you cannot trust him to look after you in an area where he cannot look after himself. I think that this will do him more good than the house he was looking to buy. Hope it works out for good!

bo_drinker

Incisor has it spot on. Sorry it has doomed to fail written all over it. He didn't even save his own deposit, took a hand out for that. If you do not go ahead wave goodbye to the deposit money as well. DON'T DO IT.

poppysarah

Tell him you would love to but can't. That in two years time when he's been saving hard you'll do all you can to help him.
It's called tough love.

Why has he got a bad credit rating? Two years to prove he can save and work hard is all you need.

PasturesNew

You are in the US, this is a UK site.

However, don't get involved. And don't let him take that deposit. It'll be throwing money away.

He's only 30, about time he grew up and started saving and fighting for what he wants.

RobertoMoir

lola1123 wrote: »

My family thinks this is a bad idea; so does my husband.

I have to say I agree. It's a lot to ask and the tantrum when you had doubts was especially nice

lola1123 wrote: »

I'm not sure why I've agreed to do this.

Neither am I. Nothing in what you've said here suggests it's going to end well. Leaving aside the impact to you of things going badly, if he can't put the basics of the deal together himself then plunging into buying a house he isn't able to run will make him worse off in the end too.

lola1123 wrote: »

I want to help but feel that this is asking too much. Your thoughts are appreciated.

Don't do it. By all means give him lots of help and support to buy his home by himself when he can. But don't get 'involved', imho.

lola1123

Thanks again, folks. There is a lot of wisdom out there. What I didn't share is that, when he asked me last year to help him raise his credit scores, I agreed to add him to my accounts which helped him a lot. And then his father also is helping him by selling one of the homes he had in trust for our boys and giving my son the money for a deposit. This money is being held in a joint account that has my name on it as well as my son's and is solely to be used as a deposit for a home.

As it stands now, a mortgage company has been evaluating my financials in order to determine whether or not I will qualify for a "preapproval" for a mortgage. And I haven't yet been "approved." Because of the U.S. economy, creditors are being very careful about giving out loans right now.. And so my son hasn't "lost" any money in any way from my agreeing to do this.

Three months have passed since I agreed to do this. The bottom line is, yes, he's going to be upset when I tell him I've changed my mind...again. I will apologize as I did before and tell him that it's not the end of the world. There will always be a house to buy. He'll just have to wait and do the work himself to clean up his credit. He'll be disappointed but I'm not helping him by just making everything easy for him.....I've been dragging my feet on this as I've been hoping that the mortgage company would not approve my application....but that is simply foolish.

Thanks for all the advice....!

Bf109

Tell him to grow the f*ck up and buy his own house. He is 30 not 13 !!!!!!.

pinkshoes

He's 30 years old and needs to stand on his own two feet, and won't learn to do that if everything is handed to him on a plate.

You could just tell him that under the current financial crisis, your salary isn't enough to get a loan for him, and the bank won't allow it, so sorry, you can't help him, but you can suggest he saves hard.