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My sister is going to be asking me for money and I am not sure what to do.
You don't need to do anything. She's an adult, and frankly, their household income is a pretty good amount. That they're drowning in debt is entirely their fault, and that they want to put themselves into even more debt, speaks to how little they care about paying off what they already owe. Meaning, you likely won't ever see a penny back from what you loan them.
I hope you really stick to not loaning them any money. The first time she hinted at needing to borrow money, you should have immediately responded with a short but firm comment about how you would be unable to loan them anything.
OP, you've got a basic problem here and it is this.
You really don't want to loan your sister the money but you lack the ability to say no. You're looking for some lender to tell her no so you don't have to.
Keep in mind that your sister will never pay you back. Any money you give her is gone, gone, gone. Give her $ 15,000 and consider it a gift that you'll never see again. Or develop the ability to just say " no" and hang onto your money. You don't need a reason to not lend her money.
Sounds like her and her husband need to go to a financial planner and make a budget, and see where all their money is going. Frequent yard sales? That means they are spending money on crap they don't need. One thing my husband and I ask before every purchase is "Do we NEED that?"
My husband and I make much less than that, and we are able to comfortably pay our bills and put money to the side. Granted we don't have children yet, we live well enough. We don't own a house either, but that's because 1- we want to buy one home that is exactly what we want, and 2- we don't want to get in over our heads.
Either way, I'd let your sister drown, not give them money, and if things fall apart give her the number of a financial planner. You do realize if you give her money you'll never see it again.
Sadly, I think someone will lend to this person. Just don't let it be you.
A well established bank will probably see her as a huge risk, but organizations like Quicken Loans or other shady outfits will be happy to charge her exorbitant fees and interest. If the builder is offering to finance, they may also ignore a lot of the red flags.
People like this is how the economy crashed. They are all over the place.
My sister is going to be asking me for money and I am not sure what to do.
She is married with two small kids, and lives in a townhouse which she bought in 2008 for about $365k with an FHA loan and a 3.5% down payment. The place is now valued at around $275 and she is underwater on the mortgage. She and my brother in law have a combined HH income of about $130K but they are deeply in debt for car loans, credit cards, etc. They are the kind of people who want their kids to have everything and spend way beyond their means. There have been many times when they have had to borrow or have yard sales to buy groceries and pay bills. They live paycheck to paycheck with no savings.
She recently told me that she found a house she wants--large, new construction, $15k down gets you $475K with builder financing. She is very excited and already planning to put her current house on the market but is concerned that it won't sell for what she paid (it won't-- they have done zero in updates and it was overvalued when they purchased it). She has broadly hinted that she might be asking me to "help" and sending me pictures of the model home (the help I am sure would be in the form of a $15K down payment to secure her lot).
I crunched the numbers with her to show her what he monthly payment would be, how much her taxes would be, etc, but this seems not to register. I do not plan to lend or gift her any money.
How do I stop this train? Is there even a loan she could get? Will $15K get you a $475K house? I am hoping she just gets turned down and forgets this idea.
Repeat after me
NO. I'm sorry but I cannot lend you any money.
If you do loan the money consider it given because you will never see it. All you are doing is enabling your sister and her husband to continue bad. Financial decisions. The only difference is they will see you as a cash cow and I guarantee you they will come asking. I do not lend money to friends or family. Creates nothing but problems.
My sister is going to be asking me for money and I am not sure what to do.
She is married with two small kids, and lives in a townhouse which she bought in 2008 for about $365k with an FHA loan and a 3.5% down payment. The place is now valued at around $275 and she is underwater on the mortgage. She and my brother in law have a combined HH income of about $130K but they are deeply in debt for car loans, credit cards, etc. They are the kind of people who want their kids to have everything and spend way beyond their means. There have been many times when they have had to borrow or have yard sales to buy groceries and pay bills. They live paycheck to paycheck with no savings.
THIS IS THEIR PROBLEM NOT YOURS. THEY NEED TO GET THEIR FINANCES. IN CHECK.
She recently told me that she found a house she wants--large, new construction, $15k down gets you $475K with builder financing. She is very excited and already planning to put her current house on the market but is concerned that it won't sell for what she paid (it won't-- they have done zero in updates and it was overvalued when they purchased it). She has broadly hinted that she might be asking me to "help" and sending me pictures of the model home (the help I am sure would be in the form of a $15K down payment to secure her lot).
GO TO YOUR FIREPLACE AND LIGHT IT. TAKE 15 THOUSAND DOLLARS IN CASH AND THROW IT IN THE FIRE. ITS THE SAME AS GIVING IT TO YOUR SISTER.
I crunched the numbers with her to show her what he monthly payment would be, how much her taxes would be, etc, but this seems not to register. I do not plan to lend or gift her any money.
GOOD. STICK TO THAT POLICY OF NOT LENDING HER MONEY
How do I stop this train? Is there even a loan she could get? Will $15K get you a $475K house? I am hoping she just gets turned down and forgets this idea
THE LOAN IS NOT YOUR PROBLEM. HER FINANCES ARE NOT YOUR PROBLEM.
.
I wasn't yelling just responding to specifics
Ok
Repeat after me
NO. I'm sorry but I cannot lend you any money. You are irresponsible and I refuse to enable you. I love you but will not throw my money away.
If you do loan the money consider it given because you will never see it. All you are doing is enabling your sister and her husband to continue extremely bad financial decisions. The only difference is they will see you as a cash cow and I guarantee you they will come asking again when they get in trouble. I do not lend money to friends or family. Creates nothing but problems.
You don't. How does she expect to pay for a $475K house if she can't pay for a $365K house? You can only sit back and allow her to live her life; you can't run it for her.
If she gets builder financing, there really isn't much to stop it. I would just sit back and watch the train wreck unfold.
^^ This
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Stop enabling
