Home     Forum     401k     401k Rollovers
    Register   Login   Members   Search   FAQs     Recent Posts    




General/Personal Advice

Reply to topic
Money Talk > Personal Finance

Author Thread
jpaschich
New Poster


Cash: $ 0.45

Posts: 2
Joined: 07 Apr 2017

General/Personal Advice  Reply with quote  

Hi all, I'm looking for opinions for a friend (no really, it is a friend Very Happy )

He is a felon/ex-con who has no job, no credit, and owes back child support from years ago. I know, I know, he sounds like a real winner, right? He has been doing work under the table for the last ten years, or at least as long as I have known him. He is married and because of his past and his child support issues (child is now maybe 25 y/o???) he has always deposited his "earnings" into this wifes account. He says he now has approximately 100K. He and his wife want to buy a home together but because of his past, lack of credit, and so forth, they tell me it is best that he remains off the mortgage. His wife doesn't make much but I guess that it is not important here. So basically, she is going to apply for the loan solo and use his 100K as a down payment. I don't really see of any way for him to "protect" himself in case they split up. Because of his past and his decisions, or lack thereof, to ignore his own personal financial freedom he has painted himself in a corner where he has no choice but to hope he doesn't get burned by his wife if the relationship were to ever end.

Any advice for this guy? He's actually been a really stand up guy and a very good guy for as long as I've known him so I just was hoping to help him cover his arse.

Thanks in advance!!!
Post Fri Apr 07, 2017 5:30 pm
 View user's profile Send private message
christcorp
Preferred Member


Cash: $ 39.65

Posts: 198
Joined: 05 Mar 2015
Location: Wyoming
 Reply with quote  

A lot depends on how expensive the house is. If it's $200k and they put 50% down, $100k, almost any bank will loan the money with him on the account. On the other hand, if it's an $850k house, the $100k is about 15% and the bank will care.

A lot also depends on the wife's income. If he's working under the table, then technically he makes zero income. With his wife not making much money, her income may not qualify for much of a loan. The first question is for her to see how much she qualifies for. Then, they could simply add $100k to that and know what they can buy

Another thing to consider is, how old are they. If the are 20-40 years old, a house isn't a band investment. If over that, they might consider to continue to rent, basically forever, and use the $100k to invest in an S&P500 type fund and work on their retirement.

Houses are fine, but the only financial advantage to owning, is being able to sell it, down size, and use the left over equity to assist in retirement. Or to leave to heirs. If they are 40's and up, they won't really be able to use any equity down the road. Thus their net worth is tied up and useless. With the costs associated with owning a home, there isn't any financial advantage for 20-30 years. Rent, and it could actually be cheaper. And if he's never really officially worked, then he can't rely much on social security or a pension/retirement.

It really depends on their age and how much time they have to work with.
Post Fri Apr 07, 2017 10:21 pm
 View user's profile Send private message
jpaschich
New Poster


Cash: $ 0.45

Posts: 2
Joined: 07 Apr 2017

 Reply with quote  

Thanks for the reply. Everything you said is what I kind of figured too. The wife told me they looked into applying together but were told they would get turned down. I found that odd considering the house they are buying is $250K (they have 100K to put down).

He is approx. 50-52 years old and she is 40 or 41. She makes very little, probably no more than $20/hr. She was approved for $135K. Also, the main reason they are looking into this is because it is his and his siblings childhood home. Obviously its more of an emotional purchase than a sound investment purchased but I can understand where he is coming from. I did tell him to cover his arse somehow and some way and also that if he did this he's losing a lot of leverage he has for future investments/endeavors.
Post Sun Apr 09, 2017 7:00 am
 View user's profile Send private message

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      





Money Talk © 2003-2016