Financing in Houston>Question Details

Single59, Home Owner in Houston, TX

My daughter begins vet school in Aug. and will need more $$ than provided by FAFSA, about $10,000 more per year. Should I cosign to keep interest low?

Asked by Single59, Houston, TX Thu Jun 16, 2011

I am 59 and single and make only $53,000 per year as an admin. asst. I have a paid-off home, but don't have enough money to retire and I am not on target either. I have $40,000 debt (credit cards and car note), and barely make ends meet. I am trying to save for retirement, but I guess I just don't make enough money. I thought about a home equity line of credit, but I am afraid. Should I cosign for my daughter? or worry about my own issues? I really don't want to risk my home.

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11
Tom Burris’ answer
Nannette could not be more WRONG!!!!!!!!!

Home Equity is a GREAT financial tool...... for some.

This advice is coming from someone who does NOT do home equity loans.

Yes, Nannette, they are wrong for some..... but to call all lenders 'sharks' just shows your lack of intelligence and knowledge on this issue. Can anyone be a 'broker'?

Geez.... Anyone can get internet connections these days.
2 votes Thank Flag Link Thu Jun 16, 2011
Single59,

For every great story about the benefits and value of home equity loans there also horror stories about people who have lost their homes. We all have given you answers based on our own experiences. However, what none have done in this forum is sit down with you and review your complete financial profile to determine what led to your current monetary situation and how you can successfully achieve your goals.

Before you make any decision, please sit down with a Money Management Counselor who can go over your precise situation and give you a financial plan of action specifically designed for you. Here is the link to where you can find a FREE HUD approved housing counselor in your area :

http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?&webListA…
1 vote Thank Flag Link Sat Jun 18, 2011
Do NOT be stupid and jepordize yourself, to destroy your own financial security, w/ debt you can not afford. NEVER get a homequity loan, which have ruined so many people, as the lenders are ruthless loan sharks.
We would not have so many foreclosures today if homequity loans had never been approved to scam people.

Take care of yourself, your potential retirement w/ no house payment and let your daughter figure it out . If she can not afford to become a vet, she can do something else!
1 vote Thank Flag Link Thu Jun 16, 2011
While the question is a little out of scope for a lender to answer..... We answer mortgage questions more than financial advice.... I do want to chime in about a particular fact..

A home equity loan will be the cheapest money you will ever borrow.
Maybe you can pay off the CC debt a lot faster this was. As I assume the CC interest is more than double what a home equity loan would be. Also, the home equity 'might' be tax deductible.

Just something to think about.

Tom Burris
Mortgage Banker
DallasLoanGuy.com
(214) 763-4629 cell/text/nights/weekends(Really!!)
tomburris@dallasloanguy.com
Lending all across the Great State of Texas!!
1 vote Thank Flag Link Thu Jun 16, 2011
Nadine is right. None of us are financial advisors or counselors here, so take EVERYTHING you here with a grain of salt and DON'T take any of this as advice.

For every great story, you have a bad one.
For every great restaurant, you have a horrible one.
For every great agent that is out there, you have a lazy one that gives bad service.

Usually, the MAJORITY of experiences are POSITIVE, but you only hear about the negative ones because they tend to be much more vocal. Do your own research, speak with a financial advisor our housing counselor, sit down with your family, and decide what is best for you.

Best of luck. I assume that your daughter is going to A&M? Gig 'em!

Brian Rayl
0 votes Thank Flag Link Sat Jun 18, 2011
Single,

Tom is right. Each person is different, and you may very well have a great case for a home equity line of credit (HELOC).

Nannet says that the entire foreclosure issue is because of HELOCs? I'm sure she did not help a SINGLE client buy a new home out of their price range either, right?

People lost their homes to HELOCs because they took the credit and bought a new car or went on vacation. As long as you have a plan of action for your money, you will be fine. My parents recently did this. They took out at (if I recall correctly) 4% APR. They paid off a number of other debts, such as credit cards, etc. that they were paying between 8 and 15% interest on. The difference gave them an extra couple hundred dollars per month, which they used to pay down the HELOC. Other than their home, they will be debt free in about 2 years, and NEVER did they risk loosing their home because they were SMART about it.

People can blame anybody for anything... but in the end, if you are SMART about what you are doing, then it is very difficult to get burned. You really need to do something to get that debt paid down quickly, especially if you are paying minimum payments and still barely getting by month to month.

Notice I have not said ANYTHING about your daughter? That is going to be a personal decision. Vet school is very expensive and is now, what, 8 years? That is a lot of debt for your daughter to rack up as well, but she has to follow her dreams. There are a ton of scholarship programs out there, or opt for cheaper housing, get a couple of roommates, etc... there are ways to cut corners. In the end, if the only way to go to college is to get someone to cosign? I cannot argue against supporting your children. My parents helped me. I assume you are talking about student loans... those payments will be deffered while she is in school, so as long as she finishes school, there is no way she can default for 8 years, right?

It's more than real estate. It's RAYL-Estate!

Brian Rayl
Keller Williams Elite
972-949-4222
Brian@Rayl-Estate.com
http://BrianRayl.com
0 votes Thank Flag Link Sat Jun 18, 2011
NO..... this is not a good idea for your financial situation.
You sign and the debt is as good as yours.

You need to get that credit card debt paid off quickly.

Start listening to Dave Ramsey show.
0 votes Thank Flag Link Fri Jun 17, 2011
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
Single59,

Nannette gave you a great answer. I would not take out a loan or cosign any loan at your age since you don't even have enough money to retire and it sounds like you are currently living paycheck to paycheck. You should worry about your own issues and work on saving more money for your retirement. Flight attendants always tell passengers to "put on your mask first before trying to assist others in case of an emergency." My advice to you is the same.
0 votes Thank Flag Link Thu Jun 16, 2011
I cannot blame you for not wanting to have any notes attached to your home.
Just remember that even if you co-sign with your daughter, that you will both be responsible for the note, other than that, she would get a better rate with your co-signiture since you do own your home free and clear. Check with the school to see if they recommend any lenders that have a good reputation for treating students fairly. Shop and compare. Also, make sure that you and your daughter keep hunting for more "free money". There are scholarships and high grade incentives that can be found. Do have in writing your agreement with your child concerning the payment of the loans to insure there are no misunderstanding that is is not a gift. Good luck on investing in your child's future,
0 votes Thank Flag Link Thu Jun 16, 2011
The best place to invest is in your children.
0 votes Thank Flag Link Thu Jun 16, 2011
I have just started working a program that might help you. Equity line of credit could work for you.

Feel free to contact me to discuss your issues.

Tom Brownmiller
281-905-4281
tom@tombrownmiller.com
0 votes Thank Flag Link Thu Jun 16, 2011
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