Post # 1
I am a regular poster but this is my alter-ego for more personal posts I don’t want traced back to me.
I wear the financial pants in our relationship. I make $30K more than FI and have excellent credit. His credit is bad and he owes back taxes. We have begun to talk about buying a home. I already have a property that I do not want to sell but was recently was approved for another mortgage to purchase a second property. Of course, if he could do this we could afford more house together or even he could purchase on his own and qualify for first time buyer programs that would be beneficial to us.
At any rate, I am not concerned about being able to afford both mortgages, but I am concerned about having ALL the financial burden on my credit. I presume that if I take on this mortgage it will be harder for me to get approved for credit later as I will have a large mortgage debt on my report. Have any of you dealt with anything similar? Just thinking towards the future and buying a car, etc.
We could wait to buy the home until he’s financially prepared but that may take years and we’ve outgrown the home we’re in now.
Post # 3
If dave ramsey were here, he’d tell you that you don’t really have a choice BUT to wait until he is more financially prepared. Instead of putting money towards a new house, put money towards those back taxes.
Post # 4
@rosworms: I totally agree.
I would also suggest talking to a financial advisor to map out a financial plan. You guys have to get on the same page about money since it is the primary cause for divorce. He needs to figure out why he has bad credit in the first place and have a plan for changing his spending habits in the future. This is totally something that can be worked out but i would do it before buying another home.
Post # 6
I wouldn’t buy unless you want the property. Save up the cash, buy gold or other safer investments. Properties can be an investment, but unless it is an income property, you will generally make more elsewhere. I know the housing market is looking really good right now, but in a stable market, and hopefully we are on our way back to one, the average increase is 3% a year, in my area- this could be different for you. I’m sure you can get better than that somewhere else. In the mean time you will create a early retirement, college for kids, rainy day fun, international vacation etc fund and your FI can repair and catch up his stuff and hopefully carry a little more of the load.
Post # 7
@blondilocks: I would seriously consider this.
And check into the back taxes, will they become your back taxes once your married. My dad always tells me you marry him financially too, but I don’t really know how that works at all.
Post # 8
If you’re making a committment to a life together, I agree that all your extra income should be going towards getting him as financially secure as you are. I know not everyone agrees with this, but to me a merging of assets is a merging of assets. My fiance makes a little bit more than me, but at this point we only talk in terms of joint income and our disposable income goes to clearing OUR debt – whether it started as mine or his, its now ours. Again – i know that way of thinking isn’t for everyone, so I’ll reitterate that its just my opintion.
Post # 9
Thanks, everyone. I didn’t mean to paint FI as irresponsible. That is not the case. We know why his credit is bad and he is working to improve it.
@mzlouis2b: I have considered a financial advisor but not sure where to find one. I met with one years ago but they wanted $600 just to get started. Not sure if that is the norm, but I wasn’t and still am not willing to pay that much. Any resources would be appreciated.
@blondilocks: and @Phofe2774: Why a pre-nup? As I understand it, as long as none of my accounts have his name on them his creditors cannot come after them. The home would be in my name only. Please elaborate as I am not very familiar with pre-nups.
@Phofe2774: The property wouldn’t be an investment for us. We would be living there for a long time. We are currently sharing 600 square feet and needless to say, it’s not enough space. Our area is a lot different than the rest of the country in that the housing market dipped but nothing in comparison to the rest of the country. Prices have been steadily rising here and we fear that if we wait a year or two while his credit improves, we will be priced out.
@ScarletBegonia: I agree with yoru thinking and I have pretty much covered all our living expenses while he paid down his debt focusing on Uncle Sam who is the LAST person you want to owe money to. I have helped with some of his debts but he is not interested in my help for paying his debts so we’ve made other arrangements.
My question really is, if any bees have the sole burden of the mortgage on their credit and how that affected their credit and their ability to apply for credit in the future. Anyone in that situation?
Post # 10
I am not in that situation..but I would like to know the answer when you get one..so all I can do unfortunately is *bump* this thread!
Post # 11
Unlses the laws are different in your state from mine, any property aquired during the marriage regardless of whose name it is, belongs to the both of you. Couldnt his collectors pursue this new property as well?
I do think you’d be over-stretched. I do believe doing things like purchasing a car with a payment would become more difficult unless you’ve got tons of cash stocked away.
I would honestly be fearful of taking on so much debt. I hope you have enough cash stocked away to manage it all in case of a layoff or other job trouble.
Post # 12
Just because they’ll give you another mortgage in your name doesn’t mean it’s a great idea for you…
Why not find a tenant for your current place and then you and he rent a larger house/condo for the next few years?
It sounds like you clearly need more square footage, but that doesn’t mean you have to buy, right now. Make sure he cleans up his tax situation and actually takes action to improve his credit in the mean time.
Post # 13
@2embarrassed: This is second hand experience from my parents and how they’ve always handled their money. It might be an idea for you because when my mom met my step-dad she had really bad credit and owed a lot in back taxes so it’s just an idea. We’ve always had two houses, our main house (which we moved a lot so over about 10 years he had about 7 houses in his name at different times) and a cabin house in the mountains that are both in my step-dad’s name because he has the better credit of the two of them. Then to help my mom get her credit back up, they would buy a car that they could pay off in a couple years (usually 2 or 3 max) and then pay it off in half the time. This got my mom’s credit back up and my step-dad never had any problems getting new mortages or co-signing for a car if my mom needed it.
I hope that made some sense, you can PM me if you want and I can try to explain it a little better.
Post # 14
@peanuthead: We’re not married yet . so this property like the one I already own would be property I brought into the marriage. i do plan to have some paperwork drawn up outlining his contributions, etc. to the second home for his protection and mine and if something would happen to me it would pass to him, etc. The only reason his name won’t be on the second home is his current financial situation and the risk that a creditor would pursue it.
Thanks everyone for your input.
Post # 15
Can you work on his credit for a year, and then buy a second property in both your names?
Post # 16
Have you talked to a tax advisor about the possible tax implications?