wedding/honey moon/house down payment

[james.hendrickson]

Magic Johnson
You know, I'm with you there.

A while back I was out hunting and a tree fell on my truck. It banged the heck out it - shattered a couple of windows, beat up the side, dented the heck out of the thing. The car was basically a loss.

And what did I do instead of thinking through what the right decision was? Did I go and file a claim with my insurance or think about repairing it? No, I went and bought a new truck because I was in an emotional head space where I valued my own emotional satisfaction of having good looking transportation over my own financial well being. And, you know what? Buying the new truck proved to be a poor decision. It met my short term emotional needs, but it cost me payments and increased insurance costs in the long run. So...by wanting to solve my immediate problem I shot myself in the foot over the long run. I'm still paying the higher insurance costs.

I think DisneySteve is just saying he doesn't want you to make that same mistake.

[Magic Johnson]

Can you even qualify for a mortgage? .

I think so. I’ve qualified for mortgages three times before (applied w/ my ex each time) since 1998. I made every single mortgage payment on time, in full.

That’s a really high priority for me.

My credit score is +750, and my income is greater than the national and local average, and I work for the USDA, which is a stable employer, and I have a 19 hr/wk side hustle @$14.69/hr.

[scfr]

Why does your sister want to sell the house?
If $50K in upgrades would be "required" in order to live there, how did your sister manage to live in the house?
What will happen to your fiance's father when she moves out? Here I'm assuming that she has some some sort of caretaker role, whether he admits it or not. Does the father own the house they live in? Is the 3 of you living together an option?

[Magic Johnson]

Why does your sister want to sell the house?
If $50K in upgrades would be "required" in order to live there, how did your sister manage to live in the house?
What will happen to your fiance's father when she moves out? Here I'm assuming that she has some some sort of caretaker role, whether he admits it or not. Does the father own the house they live in? Is the 3 of you living together an option?

My sister is looking for a new job in a different town, a larger town. I think she doesn’t want to live in such a small town anymore.

My sister has very low standards, and makes much less money than I do. I’ve not spent a lot of time in the house, but my parents have. $50K was their best estimate when I took my mom out to dinner Sunday.

I have no idea what will happen to my future FIL when she moves out (which she’s going to do regardless of whether or not I buy this house). No, he doesn’t own that house. The three of us living together is not an option if I’m going to keep my job. My job is in the opposite direction of my fiancé’s house. She lives an hour away from where I live, and an hour 25 minutes from my work.

My fiancé’s brother lives a couple miles from his dad, so he’ll probably help more than he has been.

[Magic Johnson]

Some of you keep mentioning what kind of mess I’m in. I always pay all of my bills on time.

No, I don’t have a 6 mo. EF, or even close to 25X spending saved for retirement.

But if I’m in a “mess”, my goodness, most other people are half a step away from bankruptcy.

[kork13]

Some of you keep mentioning what kind of mess I’m in. I always pay all of my bills on time.

No, I don’t have a 6 mo. EF, or even close to 25X spending saved for retirement.

But if I’m in a “mess”, my goodness, most other people are half a step away from bankruptcy.

Clearly you're not aware of how close to accurate this is -- frequent surveys & studies all outline the fact that the vast majority of households would be unable to cover even a $500 or $1000 emergency expense... That they're saddled with enormous levels of debt... That they live paycheck to paycheck on the regular... That a job loss or medical emergency would mean they lose their home, can't feed their families, and so on.

[Magic Johnson]

Clearly you're not aware of how close to accurate this is -- frequent surveys & studies all outline the fact that the vast majority of households would be unable to cover even a $500 or $1000 emergency expense... That they're saddled with enormous levels of debt... That they live paycheck to paycheck on the regular... That a job loss or medical emergency would mean they lose their home, can't feed their families, and so on.

But here’s the argument I’m trying to make - I’m almost 50 years old, and I’ve never missed a payment. Ever.

Somehow I’ve always managed to pull the money together. Every time.

That’s not an accident.

I’m looking for advice, not rehabilitation.

Edit to add:

I just ran the amortization. A $50,000 loan at 5.9% interest, over 15 years is $419.23/mo. That's less than I pay for rent.

If my finace can cover the cost of the house updates/expansion, we're alright.

Where's my flaw in thinking?

[Jluke]

Plus property taxes plus insurance plus PMI

does your rent include other services that you will now have to pay for separately as a home owner (water, sewer, trash come to mind).

will banks give a mortgage for 50k? Would the terms be different?

where will you get the 50k for renovations?

Why didn’t you go 30-year mortgage and higher loan amount to cover renovations? Assuming house would appraise, etc to allow for a larger loan.

lots to think about.

[Magic Johnson]

Plus property taxes plus insurance plus PMI

does your rent include other services that you will now have to pay for separately as a home owner (water, sewer, trash come to mind).

will banks give a mortgage for 50k? Would the terms be different?

where will you get the 50k for renovations?

Why didn’t you go 30-year mortgage and higher loan amount to cover renovations? Assuming house would appraise, etc to allow for a larger loan.

lots to think about.

You’re right. Thanks.

[disneysteve]

Where's my flaw in thinking?

The first thing to do when you find yourself in a hole is to stop digging.

What you are proposing is to dig way deeper.

I wish you the best but I’m done here. Good luck.

[Magic Johnson]

I know when to shut up.

Thanks for all of your help since February, Saving Advice.

Almost all of it has been very helpful, and you’ve given me much to think about.

Peace.

[bjl584]

You're going to have trouble qualifying for a 50K mortgage on a fixer upper from a traditional lender. You'll have to find a hard money lender for that.

I'll just say this.
I've been a member of this forum since 2006. Since then, I've seen a lot of people such as yourself post similar stories.
I don't want to say that you are in a state of denial, but I can say that over the years, no matter how much advice or preaching that the regular members gave to people in your situation, almost zero progress was made and no minds were changed.

You are going to have to come to the realization of your situation on your own and take some real steps to right the ship.
Nothing that I or anyone else says is going to change your mind.
You need to change your mind.

There is tons of good advice here and in other threads from people who were once in your situation and from people who are doing very well financially.
My advice is to listen to it and apply it to your own life.

Good luck to you.

[Magic Johnson]

You're going to have trouble qualifying for a 50K mortgage on a fixer upper from a traditional lender. You'll have to find a hard money lender for that.

I'll just say this.
I've been a member of this forum since 2006. Since then, I've seen a lot of people such as yourself post similar stories.
I don't want to say that you are in a state of denial, but I can say that over the years, no matter how much advice or preaching that the regular members gave to people in your situation, almost zero progress was made and no minds were changed.

You are going to have to come to the realization of your situation on your own and take some real steps to right the ship.
Nothing that I or anyone else says is going to change your mind.
You need to change your mind.

There is tons of good advice here and in other threads from people who were once in your situation and from people who are doing very well financially.
My advice is to listen to it and apply it to your own life.

Good luck to you.

My fiancé and I talked about it last night, and we decided together that we're probably not going to buy my sister’s house. The timing isn’t right (she wants to move out soon, and we’re not ready to move yet.

What’s a hard money lender? I’ve never heard that term?

I know you SA people are right on most things. It takes me a while to process things. I’m not the type to blindly take advice (maybe most people are that way on most issues?).

I process, and I think, and I pay all my bills, and I try to do better.

[kork13]

Hard money is basically a non-confirming short-term (often 1-2 yrs max) investment loan, often used for properties that are getting renovated, especially when the intent is to resell the fixed up property.

That may not necessarily be required to purchase a home that needs renovation though. As always, it depends on a variety of factors (that I frankly can't enumerate authoritatively). But I'm general, as long as the property is viable as a property that is safe to inhabit & in a "finished" state (not under construction), I think many lenders would work with that in spite of an apparent need for repairs/upgrades.

[bjl584]

My fiancé and I talked about it last night, and we decided together that we're probably not going to buy my sister’s house. The timing isn’t right (she wants to move out soon, and we’re not ready to move yet.

What’s a hard money lender? I’ve never heard that term?

I know you SA people are right on most things. It takes me a while to process things. I’m not the type to blindly take advice (maybe most people are that way on most issues?).

I process, and I think, and I pay all my bills, and I try to do better.

A lot of times traditional banks won't touch fixer upper properties depending on how bad it is.
Also, many won't write loans below a certain dollar amount.
50K might be below the threshold for many lenders.

Hard money lenders are usually private investors who extend loans to real estate investors, and flippers.
Often at higher interest rates and more creative terms than a normal bank