My fiancé wants to buy a house soon for his family in NJ then another house when we get married in 2 years I think this is a bad move help!!!

Asked by Fatima, Prospect Lefferts Gardens, Brooklyn, NY Tue Jan 21, 2014

We are both young individuals with good jobs, however I think we will face many financial hardships. I think 2 mortgages at once is a major RISK!!! Please provide me with financial advise to make him snap out of this and focus on us and not his family's house ( he plans on giving his family one floor for free and renting out the 2nd floor in his first house). I believe he is putting our future at stake. NJ has the highest property taxes not to mention.

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7
Debra (Debbi…, Agent, Livingston, NJ
Tue Jan 21, 2014
I enjoy your spunk, spirit and clear thinking!
Looking forward to continuing our email "conversation" tomorrow!

I totally agree with you that buying 1 (multi-family) home, for now, is enough!
Who gets to live on which floor may be determined based on the actual home.....when you find it!

To be continued!

Debbie
1 vote
you are very welcome!
Flag Wed Jan 22, 2014
i enjoy your wisdom, advise, support and rational thinking!!! Please keep in touch. Thank you again and again and again.
Flag Tue Jan 21, 2014
Debra (Debbi…, Agent, Livingston, NJ
Tue Jan 21, 2014
No one can assume that the rent for 1 unit will cover the entire mortgage!

How can you say that - you have no specific financial information!
1 vote
Debra (Debbi…, Agent, Livingston, NJ
Tue Jan 21, 2014
Hi Fatima

Well, first of all, I think it's very nice that he wants to provide a home for his family, but............you will soon be his " family", too, when you get married, so I understand that you want to be sure he isn't putting your financial future in jeopardy.

That being said - has he spoken to a mortgage rep yet?
I think that would be important to do first to see how much of a mortgage he would qualify for.

From what you said, he wants a 2 family home so that he can rent out the 2nd floor and give the 1st floor to his family - rent free.
Are they in a position to help pay something monthly? Are they really willing to let him pay for it all? (remember, these will be your future inlaws!!)

Then, his plan is to buy another home in 2 years for the 2 of you.
Now, as to the home for the 2 of you once you're married.........when you look at the numbers with a lender, you will see how much of a loan you can get, and what your total costs will be..........those numbers may be enough for him to realize he is taking on too much financial responsibility.

By the way - is he asking you to go on the mortgage with him for the 2 family home?
If he is - I say don't do it, as that's between him and his family!

I don't know you or your financial picture - no idea what your incomes are......so it is really hard for anyone to help you with advice.

You're engaged to this man....you need to start now in working out differences you have.
To a certain extent, what he does with is money and family now, as a single man, is his business, but...........how it will impact your life with him down the road is something you need to sit down and discuss with him.

Get ready for marriage - it is full of compromises!
You need to work this out between you!

Best wishes........
1 vote
Thank you Debra!!! You nailed it! I have spoken to mortgage rep who is also a friend of mine and basically said do not get a mortgage in your name because you do not know what might go wrong. I doubt his family will help with the bills because he is a much more secure position than they are. I reminded him that he need to sit down and weigh his options. This is not of best interest to u nor i, nor your future family unless your family decides to pay either 1 the rent or 2 the mortgage. I basically look like the devil now because i am being realistic and practical. He is not compromising at all because he wants to make his familys dream come true.
Flag Tue Jan 21, 2014
Helene Jeane…, Agent, Metuchen, NJ
Tue Jan 21, 2014
Fatima,
You are wise to be cautious. The very BEST thing he can do right now to plan ahead is to speak with a reputable mortgage broker. I highly recommend
Marianne Jones
Millenium Home Mortgage
93-402-9112x3000
973-722-1173

Better than trying to talk him out of this, is for a mortgage broker to explain what is and is not financially feasible and sound

I wish you the best and if you are considering buying in northern NJ, I hope you will contact me to help. I own my own investment property and conduct workshops on investing. I'm sure I can help!
Best Wishes
Leni
973-876-8741
TeamHelene@KW.com
1 vote
Thank you Helene! Thank you Jeff and Kaye! You bring up a good point, the resentment is already building with me. His family will be living in the home rent free, which I think is absurd and the 2nd house will be a single family house that we alone will live in. He will be paying for everything. His family says they will help, but I very much doubt that since he is the only member with a steady well paying job. My suggestion is that he lives in the basement and his family lives on the 2nd floor and he rents the 1st floor, which he can get the most rent for since it has a yard and parking, he said no, he will rent the 2nd floor. Then when we are married we can move into the first floor and rent the basement and attic. No need for a 2nd house. But he is suggesting his family live in the 1st floor.
Flag Tue Jan 21, 2014
Think it through and come up with a way to make it a good situation for all of you and then move forward. If it is not in the best interests of all of you it could be a source of resentment and issue later on. Will his family be living in the home rent free? Will they be paying expenses of the property allowing your fiancée to purchase the property now and continue to see equity growth in the future?
Flag Tue Jan 21, 2014
Maria Myatov…, Agent, Trenton, NJ
Wed Jan 22, 2014
I lived in a two family for eight years, than I bought a single family home with the money I was able
to save living in the two family, I still have the two family, both are rentals now, and I continue to see
a profit, when the note is paid off, it will be a extra 1800 per month, minus the property taxes and homeowner, I agree with your fiancé, SORRY
0 votes
Thank You Debra for being realistic. Also, he is not planning on owning a house for 8 years before buying another house. He is planning on buying the 2nd house about 1-2 years after the first. It take about a year to buy the 1st house. Also, it takes time to find a suitable tenant. What happens when the tenants doesnt renew his lease? Who pays the bills then? This is not a multiple dwelling, only one apartment will be rented out and at most he will probably get $1400 which wont be much considering he will have 2 mortgages to pay.
Flag Wed Jan 22, 2014
You really do not have the entire picture. This home will never have rent coming in on both units, as he wants his family to live there, rent free, indefinitely. he will have to make up the deficit monthly - out of his own pocket at the same time he will be starting a new life with his fiancee.
Flag Wed Jan 22, 2014
Sandra Scran…, Agent, Denville, NJ
Tue Jan 21, 2014
Buying a two-family home is usually done as an investment property. I think it's a wonderfully unselfish idea to want to provide for his family. It's all well and good to have a dream of being able to do something like this but actually being qualified to do so is another thing. Before jumping into this sort of thing he needs to sit down with a reputable mortgage rep and see exactly where his credit-worthiness puts him in the grand scheme of things.

Yes, taxes in NJ are high but there are many areas which have affordable two-family homes. Once he's approved for a mortgage of this type then he can see what area is best suited for his financial needs and would work for all involved.

I can understand your concern about all of this if he expects your credit to make this happen and your name on one or both mortgages. I think a "one step at a time" approach is the best thing. You two need to sit down and have an open and honest discussion about what you both want in the future.

Good luck...
0 votes
Maria Myatov…, Agent, Trenton, NJ
Tue Jan 21, 2014
If he buys a two family home, He can rent one unit which will pay the mortgage usually, and
his family can live there rent free.
0 votes
thank you for your kind words!
Flag Tue Jan 21, 2014
Thank You Debra!!! Not to mention He will not get the same amount of rent equal to the monthly mortgage, property taxes, bills, maintenance, etc. Debra you give amazing amazing advice, you are a PRO!
Flag Tue Jan 21, 2014
You are making an assumption that you can't back up. You have no way of knowing what the monthly costs will be, or what the rent will be. If there is a gap between tenants, he will have the full burden of paying the mortgage.
Flag Tue Jan 21, 2014
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