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What is the right thing to do?


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#1 Mike in STL

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Posted 17 June 2016 - 07:54 PM

When my dad passed away he left his house in my brother and mine's name. We split everything down the middle. My brother has lived in the house his whole life, never moved out on his own.

 

I have a mortgage of my own already. He doesn't. He's been making the payments since dad passed, unbeknownst to the bank. There is also a sentimental value to the house in that it's a log house my dad built with his bare hands. I don't know what the hell my dad did over the last ten years or so, refinancing, second mortgages. He didn't have his affairs in great order when he passed. But there is about $220K left to pay on the house. He said when he built it in 1980, his loan was for $140K. So in 36 years, he owes $80K more than what he started with. How does that happen? Granted, the home is worth more than that. I would ballpark an estimate of $300K.

 

So our options are:

 

1. My brother gets a loan, cash out refinance. Buys out my half of the equity and he has a house in his name, do with it what he wants. 

 

2. If he doesn't get the approval for a loan, I sell my house, cash out re-fi my dad's house. Buy out my brother, my wife and I move in, he moves somewhere else. (Already asked I he would be interested in converting the basement into an apartment for him, separate entrance and all. But he's not interested). 

 

3. We sell the house, split the profit, life goes on. It's literally the last thing my brother wants to do. He's never been anywhere else. Lived with roommates, etc. He's also 25 and needs to grow up.

 

The wrench in all of this, and I've kept it quiet around here, but my job could be in jeopardy. I won't go into details until there is some closure to the situation. But If I lose my job (end of July I'll have a better picture) I am in no position to take on a mortgage higher than what I'm paying now. 

 

So to help with the burden of the payments, my mom moved in with my brother a few months back. We agreed that while we get affairs in order, and that with about $1500 a month in payments, my brother would pay $700, my mom would pay $500 (her rent she paid at her last place, and she's helping us out). I would pay $300. I'm not living there, I have my own bills, but my name is on the place so I feel entitled to help out.

 

I've been wanting my brother to get the ball rolling on trying to get this loan himself, but he's really dragging his feet, not trying too hard.  I think he knows he won't be able to get it, but I want him to have first chance, and find out what exactly he has to do, and do it. I figure if the house appraises for a decent amount, the bank will give him a loan based on the value in it for the bank if my brother defaults on payment.

 

He hasn't been putting forth much of an effort to get a loan. My situation is up in the air. 

 

Now my wife wants me to stop paying him the $300 a month I've been contributing. Of course I have to be the bad guy and tell me brother, because she won't. But I still feel obligated to contribute with my name on the place. So that becomes a fight because "I should side with my wife. Especially when it's her money too." She thinks if I don't pay him it'll get him fired up to come up with a plan. Shit or get off the pot type thing. Basically he needs to get the loan, and if he can't, be ready to sell if I lose my job. 

 

Then there is the appraisal process, which again, makes me look like the bad guy. The house needs work if we have to sell it and make more of a profit. But my wife thinks its up to my brother to pay for repairs, do whatever work himself, because he's the one thats lived there and been a part of what needs fixing. But If we both are profiting from it, I should contribute, right? But If I end up being able to buy the house, my wife doesn't want us to help pay toward anything either, so it appraises for less, and in turn the buyout of my brothers equity is less. "He can fix whatever he want's on his own." 

 

My wife, my brother, my mom whose input isn't always the best, but she's mom and feels the need to get involved. My job, money driving a wedge between my wife and my family. It's a recipe for fighting and hurt feelings.

 

What the hell do I do? 

 


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#2 BSLChrisStoner

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Posted 17 June 2016 - 08:04 PM

Option 3.... and if your brother doesn't do that, it's on him to do Option 1.   Doesn't work out for him... then move on to 3.

 

If you sell, and there is work to be done...  if your brother does the repairs, just account for that difference from the 50/50 split.


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#3 SportsGuy

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Posted 17 June 2016 - 09:02 PM

Sounds like you have to sell it. It's the easiest thing for everyone. It may not be what your brother wants but it is the easiest (taking emotions out of things) thing to do and makes it "clean".

Now, if your brother can secure a loan and buy you out, so be it but that doesn't sound likely.

Can he even get one? Credit score strong? Salary good?

If he/you want some mortgage guys and you don't have one, let me know and I will send you some names.

Also, if you need to know what the house should be worth (which may help determine if you want to sell it or not), let me know and I can look up the comps for you and give you an idea.

Also, it sounds like your dad may have taken out a second mortgage. You can find that out on mdlandrec.net. If you don't have or don't want an account there and want the info on things, let me know and I will look it up for you.
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#4 Mike in STL

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Posted 17 June 2016 - 09:31 PM

Sounds like you have to sell it. It's the easiest thing for everyone. It may not be what your brother wants but it is the easiest (taking emotions out of things) thing to do and makes it "clean".

Now, if your brother can secure a loan and buy you out, so be it but that doesn't sound likely.

Can he even get one? Credit score strong? Salary good?

If he/you want some mortgage guys and you don't have one, let me know and I will send you some names.

Also, if you need to know what the house should be worth (which may help determine if you want to sell it or not), let me know and I can look up the comps for you and give you an idea.

Also, it sounds like your dad may have taken out a second mortgage. You can find that out on mdlandrec.net. If you don't have or don't want an account there and want the info on things, let me know and I will look it up for you.

I don't think he can get one. Credit score is fine, but he make $15 an hour? He says his job plans on giving him a promotion and a raise, and maybe thats what he's waiting for. But we don't have that kind of time. Probably why he's procrastinating. 

 

I wouldn't mind if my wife and I could buy the place. I loved growing up out there (Carroll County). Big yard to play in when we start talking about kids. House we wouldn't grow out of. Pretty much the opposite of out little place in Parkville with a tiny yard, and we would probably be bumping into each other if we have two or three kids as they grow up. 

 

On the other hand we just bought out place two years ago, put a lot of work into it, almost have it to where we are down to one or two major projects away from it being quite nice. I'm not looking forward to doing that all over again. I already did some work up there when my dad passed. Stripped wallpaper and painted walls. New carpet in a couple rooms. Stuff that was 36 years old and full of smoke and pet odor. Still a long way to go to get it right again.

 

But selling it would be the easy route. No one gets hurt. Could use the equity to upgrade our current home. 


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#5 Mike in STL

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Posted 17 June 2016 - 09:35 PM

Do you guys agree with my wife on the money aspect? To me, my name being on the house means I should contribute. 

 

Or should I stop paying my part, forcing his hand to make a decision? 


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#6 SportsGuy

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Posted 17 June 2016 - 09:51 PM

Mike, what does your financial contribution get you?

Also, your brothers potential promotion won't mean anything to the bank. They look at the last 2 years income. He likely will not have shown enough. If he gets a promotion, then MAYBE next year he has a chance but it sounds to me that he is realistically 2 years away.


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#7 SportsGuy

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Posted 17 June 2016 - 09:52 PM

And Mike, if you prefer his house and what comes with it, that may be the best thing.

#8 BSLChrisStoner

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Posted 17 June 2016 - 09:52 PM

Do you guys agree with my wife on the money aspect? To me, my name being on the house means I should contribute. 

 

Or should I stop paying my part, forcing his hand to make a decision? 

 

You can pay... for awhile... but not open-ended forever (might already have been long enough) if you want the place sold, and certainly not if your circumstances change... 


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#9 Mike in STL

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Posted 17 June 2016 - 09:57 PM

Mike, what does your financial contribution get you?


Also, your brothers potential promotion won't mean anything to the bank. They look at the last 2 years income. He likely will not have shown enough. If he gets a promotion, then MAYBE next year he has a chance but it sounds to me that he is realistically 2 years away.



My contribution...nothing. Just trying to help ease the burden on him I guess.
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#10 SportsGuy

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Posted 17 June 2016 - 09:58 PM

You also have to figure out how much you have to put in the house and if you can get that money back
Out of it?

With my first house, I sold it for 20ishK more than I paid..problem is, I put in over 50k to upgrade it. Now, I did do some things that weren't neccassary and part of that allowed me to enjoy living there more.

That being said, I still lost on the overall deal even though it made my house much easier to sell based on what I did.

There's a balance there and really, the comps will tell you what your best option is because they will tell you what the home is really worth.

#11 SportsGuy

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Posted 17 June 2016 - 10:00 PM

My contribution...nothing. Just trying to help ease the burden on him I guess.


Which is great and nice on your part. I realize emotion plays a part in this and since I'm not part of it, I can take the emotion out.

And when you take the emotion out of it, what you are left with is you giving your brother 300 a month and you get nothing tangible out of it. You can fell good about yourself and that's great and I'm not trying to discount that at all.

But, if you look at it from a "business point of view", your ROI is nothing.

#12 SportsGuy

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Posted 17 June 2016 - 10:08 PM

Can you take your dads place and have your brother rent your house?

Of course, that would mean the bank believes you can carry 2 mortgages.

#13 Mike in STL

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Posted 17 June 2016 - 10:09 PM

Thanks guys. I appreciate the advice. It's tough when emotion is involved. And everyone involved in the process has biases. I see it clearer getting an outside point of view.


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#14 RShack

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Posted 17 June 2016 - 10:10 PM

The first question is:  What do *YOU* want?

 

For the moment, leave your brother out of it, leave your wife out of it, leave everybody out of it except you... Do you want to end up with that house, or do you just want the situation resolved without you moving from your current house into that house?  

 

Don't worry about anything else until you have a clear answer re: whether you want to have that house or not...


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#15 Mike in STL

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Posted 17 June 2016 - 10:18 PM

Can you take your dads place and have your brother rent your house?

Of course, that would mean the bank believes you can carry 2 mortgages.

It's possible. But I feel like if I have to play landlord for my brother (and maybe mom, lol) then more feelings might get hurt. I mean, he's 25, single, he treats the place like a bachelor pad. His friends come over and party and don't pick up after themselves. I get it. But also grow up.

 

So my wife already gets furious at me, she doesn't have the guts to lash out at my brother, every time we go up there and the basement, or his bedroom is a wreck. So if I have to play landlord, It'll be wife asking me every day if my brother is keeping his room clean. 

 

If my mom stayed there, she'd be calling me everyday for every damn thing. 

 

It's a situation I'd rather avoid all together. I have thought about if we move up there renting our current home, to strangers, as my brother is content living up that way. But i don't know the first thing about being a landlord, or what to do if the tenant calls at 3am because the water heater busted. Hell. i wouldn't know what to do if that happened to me and I live here. Besides shut off the water. 


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#16 Mike in STL

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Posted 17 June 2016 - 10:23 PM

The first question is:  What do *YOU* want?

 

For the moment, leave your brother out of it, leave your wife out of it, leave everybody out of it except you... Do you want to end up with that house, or do you just want the situation resolved without you moving from your current house into that house?  

 

Don't worry about anything else until you have a clear answer re: whether you want to have that house or not...

That's a good question. I've wrestled with the pros and cons, and it seems like long term i would love to be there. Short term I'm happy with where we are now.

 

If I lose my job the decision is made for me. Have to sell it, no doubt about it. It's why I want my brother to come to grips with reality before then and either get the loan, or face that he can't and accept that he might have to be a big boy and find an apartment with some friends next year. We've all been there.  Once the decision is made on his end, then the ball is in my court. job pending.


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#17 SportsGuy

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Posted 17 June 2016 - 10:26 PM

Well, renting allows you to get the consistent income every month..depending on what you can rent it for vs what your mortgage is.

But it can be a total pain in the ass.

#18 SportsGuy

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Posted 17 June 2016 - 10:28 PM

Mike, your job situation is obviously the hold up here.

I will say this...based off of what you say, it sounds to me that your heart and head say to take your dads place and sell yours.

If your wife agrees with that, you probably have found your answer right there.

#19 CA-ORIOLE

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Posted 17 June 2016 - 10:41 PM

Quitclaim the property to your brother. Keep your own property and tell your brother and mom they are on their own with the mortgage payment of your dad's house. Explain your financial issues and suggest they get a renter.Not enough equity there to really bother with over family. Take care of your mortgage payment. I'm a little curious why this property did not go to probate. How is title held?
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#20 RShack

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Posted 17 June 2016 - 10:41 PM

That's a good question. I've wrestled with the pros and cons, and it seems like long term i would love to be there. Short term I'm happy with where we are now.

 

If I lose my job the decision is made for me. Have to sell it, no doubt about it. It's why I want my brother to come to grips with reality before then and either get the loan, or face that he can't and accept that he might have to be a big boy and find an apartment with some friends next year. We've all been there.  Once the decision is made on his end, then the ball is in my court. job pending.

 

Well, he's just gonna let things coast for as long as possible... he doesn't wanna make a decision... other people want him to make a decision, but he just wants to keep on living in the basement... so, the idea that he has to decide before you can decide, well, that doesn't add up to me... I vote for you not waiting on him to decide... you have to decide what you want without putting him first... he can put him first and decide what he wants to do, but it sounds like he won't do that... so, regardless of all the complications, get clear about whether you want that house or not without waiting on him....

 

Given the uncertainty regarding your own finances, it's nuts for you to be subsidizing him to the tune of $300/mo... doesn't mean you pull the plug tomorrow, but it does mean that you have to set some kind of limit, with everybody knowing exactly what it is... he's not gonna do it for you, he'll be happy for you to chip in $300/mo forever.  This might mean that the house has to go on the market to be sold if he can't cover the $300 that you cannot afford to keep paying for him...

 

ps:  How much can he afford?  http://www.myhomeloa...urce=m0302&ad=1


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