Q&A: An offer of “help”

Dear Liz: My husband and I lost our home because of unemployment and being underwater (the value of the house was less than the mortgage). We now both are working full time and saving to buy another home. My father-in-law offered to help us by selling us a rental he owns and giving us a loan for $150,000. We also would have to get another loan of about $100,000.

In addition to paying him principal and interest, my father-in-law also wants us to pay the $900 rent he was getting for the home. Please advise us if you think this is a good arrangement. Is it fair for him to ask for the rental money too?

Answer: Of course not. He’s essentially asking you to pay for the property twice.

Most parents instinctively want to give their offspring a better deal than they would give a stranger. Your husband’s father is the exception — he’s asking you to agree to a deal that no stranger would consider.

Given this man’s inclination, you probably don’t want him as your banker or your landlord, let alone both. Keep saving your money and improving your credit scores so you can swing a home purchase on your own.

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  1. Kevin Gonsalves says

    Dear Liz, my wife and I would like to buy a house. I have a credit score of 708 with no Long history of established credit but I have three credit card that I have had for about 18 months never missed a payment .i am disabled and my wife has a salary of 72,000 a year as an occupational therapist and she has a credit score of 618. We need to get out of the city and buy a house in town so that the kids can have better schooling and a better environment what would be the best thing for us to do to get approved for a morgage.
    Thank you,

    • Liz Weston says

      Hi, Kevin. If you’ll need her income to qualify for a mortgage, and it sounds like you will, then she needs to get her credit scores higher. There is a lot of information on this site and in my book “Your Credit Score” on how to do that. You should be able to find the book at your local library. Good luck!