Debt Free But Not Really

**frugalredhead** · 12-19-2014, 07:34 AM

NO NO NO!! Keep your finances completely separate from your parents since they are obviously not responsible with money. My mom sounds just like your dad. She racked up credit cards that she "borrowed" from my brother and then didn't pay them. She did the same to me years ago with cards that I was an authorized user on. If your dad doesn't pay the mortgage, it is 100% your responsiblity. The fact that he can't buy a house on his own credit is a HUGE warning sign. Do NOT get involved with this.

**disneysteve** · 12-19-2014, 07:53 AM

ABSOLUTELY NOT! Do not co-sign anything for your parents. If he can't qualify for a loan on his own, then he shouldn't be getting a loan. Don't let him wreck your life. If you co-sign, you are legally responsible for the debt. When he doesn't pay, and he won't, the lender will come after YOU and there will be nothing you can do about it.

If you refuse and he goes ahead and does it without your knowledge by forging your name, file a police report and press charges. That will be the only way to get it removed from your credit report.

**ladonnarosso** · 12-19-2014, 07:57 AM

Agreed. Never co-sign for a friend or family member because you will be just as responsible for the liability as they are. If they need a co-signer to begin with, that should be a red flag!

**Petunia 100** · 12-19-2014, 12:01 PM

Do you qualify for a mortgage? Good credit is important, but you also need sufficient income, an established work history, a down payment, and additional cash in the bank.

**snafu** · 12-19-2014, 04:08 PM

Run, don't just walk away from this request. Without a 20% down payment the buyer will be saddled with extremely expensive mortgage insurance added to mortgage, interest and taxes + regular house insurance demanded by the lender. Your dad has defaulted on their agreement to pay $ 8K for the CC. You can't afford to tarnish your credit history with their demands.

If you want to help your dad, get him to manage his money effectively, give every dollar a job, live within his means and save for retirement. Understand that if your parents don't seriously save for retirement, they will most likely come to you for support.

When you are ready to buy a house, you can reverse positions and ask dad if he'd like to contribute for am equivalent share of the house. All too many financial agreements between family members are doomed before the ink dries on the paper.

**NatG11** · 12-21-2014, 09:25 AM

NO!!! NO!!! NO!!! RUN!!!
It is a bad idea. If he does not pay, you will be on the hook for the money.
It is hard to tell family no but you have to. Your Dad should have never asked you to do this. This is something that will go down hill fast.

**Weird Tolkienish Figure** · 12-21-2014, 05:38 PM

Originally posted by frugalredhead View Post

The fact that he can't buy a house on his own credit is a HUGE warning sign.

QFT. Credit scores are nothing more than a probability decision of whether or not they will pay this money back and the fact that he has bad credit means he most likely won't. Don't walk, run away from this request.

**workinabroad** · 12-23-2014, 04:23 AM

Well, Thanks to everyone. I will work on how to say no and give sufficient reasons. I definitely don't feel good about saying yes or no. He taught me about finances as he was learning, but I'm probably not qualified for a mortgage yet in the bank's eyes anyhow.

**JoeP** · 12-24-2014, 04:30 AM

This could be a teaching moment for your dad.

First, if he doesn't have enough money for a 20% down payment, then he needs to save longer, or sell some stuff, or get something less expensive.

Second, if his credit score is low, then he should know this and plan accordingly so that it doesn't impact his financial decisions to the point where he needs to ask his offspring to do something like this.

Third, assuming your dad is in his 50s or 60s, most people here will say that a mortgage at that stage in life is foolish. He should be leveraging the equity in his current house (which should be paid off by now) to pay for a smaller house. There should be little or no mortgage for this kind of move. A history of constantly "up-housing" would weaken his equity situation, and might be the reason he is coming up with only 10% down at this point.

Finally, asking your kids to help pay for something so voluntary is foolish. We don't have all the facts, but it sounds like he is putting his desire for a new house ahead of what is financially responsible, and that could absolutely damage the family relationship....over a HOUSE?

Nobody should be in a situation where they have to answer yes or no to big questions like this from a parent.

**Green43** · 12-24-2014, 04:45 PM

Save your relationship with your father and walk away.

**workinabroad** · 12-25-2014, 06:02 PM

Originally posted by JoeP View Post

First, if he doesn't have enough money for a 20% down payment, then he needs to save longer, or sell some stuff, or get something less expensive.

He should be leveraging the equity in his current house (which should be paid off by now) to pay for a smaller house.

Just in case anyone else finds themselves in this situation, I'll add to the background of the case.

He's definitely looking for something less expensive. He doesn't believe in the necessity of 20% down for some reason. He definitely makes it hard to teach him new tricks. We lost that house back in the crisis. He's since been saying he doesn't need a retirement and such and will simply get everything 'in the kids' names'. He has set up an account for us to have some type of inheritance when he dies and now wants to have a house in my (the oldest's) name.

Unfortunately, I'll have to refuse over the net/phone. He was trying to get me to fly over and do the house search and purchase in person. As I said before, I plan to purchase a house in a few years, but I don't have the savings nor a fixed income to cover those years.

Debt Free But Not Really