# My sister bought a house and now has too much debt **URL:** \ **Category:** Miscellaneous and Personal Stuff I Must Share\ **Created:** [February 15, 2012, 7:40pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958 "2012-02-15T19:40:12Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![bengangmo](https://avatars.discourse-cdn.com/v4/letter/b/50afbb/32.png) [@bengangmo](https://boards.straightdope.com/u/bengangmo)\ **Post date:** [February 16, 2012, 3:01pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/41 "2012-02-16T15:01:44Z")
> [@FairyChatMom](#): > > I honestly don’t understand the obsession with big houses. Or huge bedrooms and bathrooms. Or the “need” for a living room, formal dining room, family room, media room, and den. I quit watching HGTV househunting shows because I got sick of people whining that they couldn’t possibly survive in their 2000 sq ft house because they had one baby and were expecting another. _Really??_ Or the endless demands for gigantic spa bathrooms and walk-in closets that are bigger than the room I shared with my sister for 18 years. > > Sorry, this is a hot button issue for me. Some people just don’t think. Not only do huge houses have big mortgages, but they cost more to heat and cool and furnish, take more time to clean and maintain, and I’m willing to bet in most cases, there are rooms that are never used. We used to have a 2400 sq ft house where half of the first floor was typically untouched - we rarely entered the formal dining room or the living room except to run the vacuum. And the master suite in that house was bigger than my first studio apartment!!! Way too much house for 3 people and 2 dogs. I was glad when we sold it. We live in a 110 sqm (1150ish sq feet) apartment. Hubby, wife, MIL, 7 y.o and 18 month old. And we are very comfortable. I also don’t get the need to trade a 3 bedroom house in anticipation of first kid ---
**Author:** ![bengangmo](https://avatars.discourse-cdn.com/v4/letter/b/50afbb/32.png) [@bengangmo](https://boards.straightdope.com/u/bengangmo)\ **Post date:** [February 16, 2012, 3:06pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/42 "2012-02-16T15:06:06Z")
> [@pulykamell](#): > > That’s really not all that far off what happened. Read up on NINA (no income, no asset) loans, and know that in 2005, [43%](http://www.usatoday.com/money/perfi/housing/2006-01-17-real-estate-usat_x.htm) of home buyers put no money down on their home, and the median downpayment was 2%. > > At any rate, now that the shit hit the fan, sanity has somewhat returned and it’s no longer that easy to get a mortgage. (Hell, even when I was getting a business credit card it took some bargaining to get the credit limit I needed, when years ago when I had no possible means of repaying my card, they just kept jacking my limits up several thousand dollars at a time, unprompted. Now that I can actually pay, it’s like pulling teeth to get the credit limit I need [which I don’t need for an actual loan, just for pre-authorizations on rental equipment.]) The legally mandated minimum deposit here is 20% of the valuation ---
**Author:** ![precious082588](https://avatars.discourse-cdn.com/v4/letter/p/6de8d8/32.png) [@precious082588](https://boards.straightdope.com/u/precious082588)\ **Post date:** [February 16, 2012, 3:22pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/43 "2012-02-16T15:22:20Z")
what’s the point of having a beautiful big house when you can’t sleep anymore because of thinking about your debts??? ---
**Author:** ![precious082588](https://avatars.discourse-cdn.com/v4/letter/p/6de8d8/32.png) [@precious082588](https://boards.straightdope.com/u/precious082588)\ **Post date:** [February 16, 2012, 3:24pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/44 "2012-02-16T15:24:53Z")
what’s the point of having a beautiful big house when you can’t anymore sleep because of you debt? ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [February 16, 2012, 3:29pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/45 "2012-02-16T15:29:02Z")
> [@bengangmo](#): > > The legally mandated minimum deposit here is 20% of the valuation 20% here in the US was also historically the standard, but there’s no laws about it (although it has been floated around in the last year or so). Basically, if you want to get a loan under 20%, it requires the purchase of private mortgage insurance (PMI). That costs you generally around $100/month for a $200K loan until you reach the 20% threshold. That’s my understanding, at any rate. We bought in December of last year and put 20% down. ---
**Author:** ![Mr.Excellent](https://avatars.discourse-cdn.com/v4/letter/m/f19dbf/32.png) [@Mr.Excellent](https://boards.straightdope.com/u/Mr.Excellent)\ **Post date:** [February 16, 2012, 3:33pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/46 "2012-02-16T15:33:56Z")
> [@FairyChatMom](#): > > I honestly don’t understand the obsession with big houses. Or huge bedrooms and bathrooms. Or the “need” for a living room, formal dining room, family room, media room, and den. I quit watching HGTV househunting shows because I got sick of people whining that they couldn’t possibly survive in their 2000 sq ft house because they had one baby and were expecting another. _Really??_ Or the endless demands for gigantic spa bathrooms and walk-in closets that are bigger than the room I shared with my sister for 18 years. > > Sorry, this is a hot button issue for me. Some people just don’t think. Not only do huge houses have big mortgages, but they cost more to heat and cool and furnish, take more time to clean and maintain, and I’m willing to bet in most cases, there are rooms that are never used. We used to have a 2400 sq ft house where half of the first floor was typically untouched - we rarely entered the formal dining room or the living room except to run the vacuum. And the master suite in that house was bigger than my first studio apartment!!! Way too much house for 3 people and 2 dogs. I was glad when we sold it. You and I are absolutely on the same page here. Heck, my first apartment was a one-bedroom, and I moved to a _studio_ because I realized I didn’t need that much space. ---
**Author:** ![Rhiannon8404](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rhiannon8404/32/17929_2.png) [@Rhiannon8404](https://boards.straightdope.com/u/Rhiannon8404)\ **Post date:** [February 16, 2012, 3:48pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/47 "2012-02-16T15:48:38Z")
I’m with those who don’t understand the need for a huge house, unless you are absolutely bursting at the seams in your current one. I do think there is a mentality now that all children “need” their own bedrooms, plus parents need an office/den even if they don’t work from home. So if you’re going to have three kids, you need a 5 bedroom house. We bought a very typical 3b/2b house, 1400 sq ft. in 1994 when we were first married. We figured we’d have a few kids, dogs and cats, etc. Turns out we only have one child (still plenty of pets though). I am so glad we did not “trade up” in anticipation of more children. We all rather like each other and spend a great deal of time in the same room, though the kid, (13 yo) spend quite a bit in his own room. I cannot imagine have a home twice as big. ---
**Author:** ![elbows](https://avatars.discourse-cdn.com/v4/letter/e/b3f665/32.png) [@elbows](https://boards.straightdope.com/u/elbows)\ **Post date:** [February 16, 2012, 3:59pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/48 "2012-02-16T15:59:57Z")
The highest ‘price’ that’s going to be paid here, it seems to me, is the one your sister and her husband are about to pay to learn to make their own decisions. They sound like good people, so I think they’ll survive. Your parents are going to have a chance for some learning too. It will be interesting to see, how they are, about owning their part, in the coming clusterfuck. They could learn something about letting kids make their own mistakes, since they’ll have to pay the freight, in the end. Or, they could stick to their story, old people sometimes do, regardless. ---
**Author:** ![Foxy40](https://avatars.discourse-cdn.com/v4/letter/f/a9a28c/32.png) [@Foxy40](https://boards.straightdope.com/u/Foxy40)\ **Post date:** [February 16, 2012, 4:02pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/49 "2012-02-16T16:02:43Z")
Before I got married and had my second child, my son and I lived in a 1200 sq foot house with three bedrooms, two bathrooms on a regular sized lot. I paid $64,000 in 1995 and had a mortgage payment of around $500 per month. When the husband moved in and the new baby came, we enclosed the back porch and made it an office/famly room. Everything was great until I got the big house bug. Now I pay more than my old mortgage in utilities, $200 per month for landscaping and pool cleaning and $300 per month for a cleaning lady. I mentally kick myself every day now that the house I live in is only worth what I paid for it in 1999. Sigh… ---
**Author:** ![you\_with\_the\_face](https://avatars.discourse-cdn.com/v4/letter/y/ecccb3/32.png) [@you\_with\_the\_face](https://boards.straightdope.com/u/you_with_the_face)\ **Post date:** [February 16, 2012, 4:13pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/50 "2012-02-16T16:13:31Z")
I don’t understand why they had to borrow 100K from your parents to buy this new house. Is that how much they needed for the downpayment? Even with tighter lending requirements now, that sounds really high to me. And were they able to sell their old house? It definitely sounds like they jumped the gun on this decision, but people can be amazingly resourceful when they suddenly have screaming babies to feed. It could be that they have luxury expenses (like dining out or lavish vacationing) that can be sacrificed if having a kids is really a priority for them. There are people with much bigger problems out there, so I wouldn’t freak out too much. ---
**Author:** ![brickbacon](https://avatars.discourse-cdn.com/v4/letter/b/898d66/32.png) [@brickbacon](https://boards.straightdope.com/u/brickbacon)\ **Post date:** [February 16, 2012, 4:35pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/51 "2012-02-16T16:35:48Z")
> [@you\_with\_the\_face](#): > > I don’t understand why they had to borrow 100K from your parents to buy this new house. Is that how much they needed for the downpayment? Even with tighter lending requirements now, that sounds really high to me. And were they able to sell their old house? Good question. Plus, how is there mortgage 2k/month on a 550k house? That said, in the long run, I think this will work out fine. It was probably better to buy now, and grow into the house given interest rates are a low as they will probably ever be, and their incomes should rise. She may have to work more than part-time, but assuming they don’t make too many mistakes, they should have no problem paying their mortgage and having a kid. Despite all these figures saying it cost 250k to raise a kid, the true added cost are considerably less than that. If if cost that much, few people could afford to have a child. While they probably cannot afford a fancy private school and twice yearly international vacations, they should not be struggling. Plus, the unemployment rate for people with graduate degrees is basically as low as it can be. As much as this recession has hurt people, the highly educated are generally not amongst them. With the added benefit of parents in a position to lend you a 140k over a few short years, nobody should really be worried they aren’t gonna make it. ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [February 16, 2012, 4:46pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/52 "2012-02-16T16:46:30Z")
> [@brickbacon](#): > > Good question. Plus, how is there mortgage 2k/month on a 550k house? I thought that was a bit low, too, but putting it in an online calculator and assuming a 20% downpayment (which is what I assume the $100K went towards), I’m getting just a hair above $2.1K for a 4% 30-year loan. This is just for the mortgage loan itself, though, not counting property tax and insurance escrows that usually are bundled in. ---
**Author:** ![raspberry\_hunter](https://avatars.discourse-cdn.com/v4/letter/r/b19c9b/32.png) [@raspberry\_hunter](https://boards.straightdope.com/u/raspberry_hunter)\ **Post date:** [February 16, 2012, 4:58pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/53 "2012-02-16T16:58:04Z")
> [@elbows](#): > > The highest ‘price’ that’s going to be paid here, it seems to me, is the one your sister and her husband are about to pay to learn to make their own decisions. > > They sound like good people, so I think they’ll survive. Yeah. It’s true. My sister does (obviously) have parental issues, and, um, obviously doesn’t think about debt/finance the same way I do, but mostly she and her husband are pretty awesome, and they’ll work it out. > [@you\_with\_the\_face](#): > > I don’t understand why they had to borrow 100K from your parents to buy this new house. Is that how much they needed for the downpayment? Even with tighter lending requirements now, that sounds really high to me. And were they able to sell their old house? > > It definitely sounds like they jumped the gun on this decision, but people can be amazingly resourceful when they suddenly have screaming babies to feed. It could be that they have luxury expenses (like dining out or lavish vacationing) that can be sacrificed if having a kids is really a priority for them. There are people with much bigger problems out there, so I wouldn’t freak out too much. Yeah. I’m not freaking out that their lives are going to be horrible (although I imagine it isn’t going to be great for a while), just that I am surprised to find them living in a Suze Orman show 🙂 They borrowed the down payment money, yes, so they could do a 20% down payment. No, they haven’t sold their old house. That’s a whole other barrel of fun. > [@brickbacon](#): > > Plus, how is there mortgage 2k/month on a 550k house? Sorry, I wasn’t clear they were putting 20% down from my parents. If you plug 80% of 550k = 440k into a mortgage calculator at today’s rates you’ll get something a bit above $2k. That doesn’t include taxes or insurance of course, which I forgot about when I talked to her yesterday. (On preview: I see **pulykamell** did the same calculation 🙂 ) Also I think someone asked why the banks weren’t up in arms over the gift from my parents. I think they have had to provide extensive documentation from my parents showing it’s a gift and that my parents’ bank statement can handle it. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [February 16, 2012, 6:33pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/54 "2012-02-16T18:33:52Z")
> [@raspberry\_hunter](#): > > Yeah. It’s true. My sister does (obviously) have parental issues, and, um, obviously doesn’t think about debt/finance the same way I do, but mostly she and her husband are pretty awesome, and they’ll work it out. > > Yeah. I’m not freaking out that their lives are going to be horrible (although I imagine it isn’t going to be great for a while), just that I am surprised to find them living in a Suze Orman show 🙂 > > They borrowed the down payment money, yes, so they could do a 20% down payment. > > No, they haven’t sold their old house. That’s a whole other barrel of fun. > > Sorry, I wasn’t clear they were putting 20% down from my parents. If you plug 80% of 550k = 440k into a mortgage calculator at today’s rates you’ll get something a bit above $2k. That doesn’t include taxes or insurance of course, which I forgot about when I talked to her yesterday. (On preview: I see **pulykamell** did the same calculation 🙂 ) > > Also I think someone asked why the banks weren’t up in arms over the gift from my parents. I think they have had to provide extensive documentation from my parents showing it’s a gift and that my parents’ bank statement can handle it. Your parents should make sure they talk to an accountant about gift tax on that gift. ---
**Author:** ![Doug\_K](https://avatars.discourse-cdn.com/v4/letter/d/b5ac83/32.png) [@Doug\_K](https://boards.straightdope.com/u/Doug_K)\ **Post date:** [February 16, 2012, 6:49pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/55 "2012-02-16T18:49:05Z")
> [@Frylock](#): > > House values will only go up! > > Your income will only go up! > > You can get a job anywhere you like because you can operate a computer! > > You can get a job anywhere because you are certified to teach! > > You have a PhD, you will always have a good job! > > Those and many other things are on the list of things my wife and I have heard from foolish old people. > > Yeah, that’s what I said. Foolish. Old. People. You forgot: You can practically write your own paycheck once you get your CNA. ---
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [February 16, 2012, 6:59pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/56 "2012-02-16T18:59:01Z")
> [@aceplace57](#): > > I didn’t realize they had relaxed loans qualifications that much since mine in 1989. I went through a mortgage company because they were loaning Bond Money that the city had recently issued. The Bond Money was fixed rate and the best interest rate available at that moment in time. > > If they just started giving loans to anyone that walked through the door then the mortgage crises finally makes sense. When I heard about what was actually going on with mortgages in the States before the subprime crisis, I couldn’t believe it - just look up “liar loans” if you want to learn more. My response to learning about these mortgages was, “You can’t DO that! People who can’t afford houses can’t be allowed to buy houses!” but I was wrong - that was indeed exactly what was going on. Then you add in all the dishonesty and fraud on the part of the banks and brokerages, chopping up these bad mortgages (that they _knew_ were bad) and disguising them and selling them as good investments… But I’m getting a bit off-topic. 🙂 ---
**Author:** ![pbbth](https://avatars.discourse-cdn.com/v4/letter/p/f9ae1b/32.png) [@pbbth](https://boards.straightdope.com/u/pbbth)\ **Post date:** [February 16, 2012, 7:45pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/57 "2012-02-16T19:45:30Z")
> [@raspberry\_hunter](#): > > Yeah. To be fair to my sister and parents, that was part of the plan: my mom and dad were planning to live-in for a while to take care of the hypothetical kid(s). But somehow they all overlooked the fact that my sister and mom will kill each other if they’re in the same place together for too long. You need to tell your sister right now that she cannot depend on childcare from your mother. Lots of people have a parent that watches their kids and it works out just fine but lots of people get fucked over really badly with that too. Like me, for instance. When I had the baby I decided I wanted to stay home and start my own business instead of going back to work. I got disapproving phone calls from both sides of the family (and at one point a literal sobbing plea from my SIL) telling me that I _had to_ go back to work. I finally gave in and said fine, I would go back to work until my husband got a raise at his job and then I would quit but that because our plan had been for me to stay home that we hadn’t arranged for other childcare. My mother in law jumped in and said she would sit for us 5 days a week for the first 6 weeks while we found someplace or someone to watch the baby. The first day I was back at work I came home from the office and she told me that she had forgotten she had doctor’s appointments the next day and had planned a trip to Florida the week afterwards so she wouldn’t be able to offer child care after all. :smack: The next day I brought my baby into the office with me and explained everything to my supervisor and told her that I wouldn’t be able to come back to work the way I planned. In the end I got exactly what I wanted and I spend my days taking care of my daughter and taking an online class necessary in my industry to start my own business but it was a really horrible way to go about getting what I wanted. If my intention had been to keep working and we needed that money for survival it would have been so bad that they would have needed to invent a new word to describe how fucked we were. ---
**Author:** ![Zulema](https://avatars.discourse-cdn.com/v4/letter/z/db5fbb/32.png) [@Zulema](https://boards.straightdope.com/u/Zulema)\ **Post date:** [February 16, 2012, 8:16pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/58 "2012-02-16T20:16:53Z")
You can kind of excuse this type of behavior from first time home buyers who don’t know all the added costs involved with owning a home but to make such a huge mistake for a second house twice as large as a family of 4 even needs is strange and baffling. Didn’t they sit down and figure out the costs? Their smaller house was plenty big enough for two kids at least. Part of the problem with America is that we’re encouraged to think that if we can afford it, we should get it, even if we don’t want or need it. That’s why we have neighborhoods of 5000 sq ft houses for families of 3 and no one is ever home because they have to work so hard to pay for it. ---
**Author:** ![raspberry\_hunter](https://avatars.discourse-cdn.com/v4/letter/r/b19c9b/32.png) [@raspberry\_hunter](https://boards.straightdope.com/u/raspberry_hunter)\ **Post date:** [February 16, 2012, 9:11pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/59 "2012-02-16T21:11:25Z")
> [@Dangerosa](#): > > Your parents should make sure they talk to an accountant about gift tax on that gift. Yeah – I am told that it is all kosher with the gift tax (each of them has given to my sister and her husband separately and in conjunction with the turning of the calendar year, apparently, they say, it’s all okay). I’m not an accountant, and it’s not my house, so I haven’t checked them on this. ---
**Author:** ![raspberry\_hunter](https://avatars.discourse-cdn.com/v4/letter/r/b19c9b/32.png) [@raspberry\_hunter](https://boards.straightdope.com/u/raspberry_hunter)\ **Post date:** [February 16, 2012, 9:17pm UTC](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958/60 "2012-02-16T21:17:11Z")
> [@pbbth](#): > > When I had the baby I decided I wanted to stay home and start my own business instead of going back to work. I got disapproving phone calls from both sides of the family (and at one point a literal sobbing plea from my SIL) telling me that I _had to_ go back to work. Okay, so, this whole story piques my interest, but particularly this part. I mean… I can understand why grandparents might disapprove (although my in-laws, I think, disapprove that I’m working rather than otherwise), but your SIL? A sobbing plea? …Why does she care? Are you supporting her family or something? And, um, wow. And this reminds me, my mom volunteered to watch the Little One too, and she twisted her knee and I said hell no you’re not looking after an infant with a bum knee, so we had to find a babysitter on short notice. Luckily it was summer and there were a lot of good ones looking for a summer job… Oh, and **zulema** , yeah. My in-laws brought up three kids in a 3bed/1.5bath house. (Though whenever I bring this up my parents shudder.) [Previous page](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958.md?page=2) [Next page](https://boards.straightdope.com/t/my-sister-bought-a-house-and-now-has-too-much-debt/612958.md?page=4)