They Are Moving Too Fast
Suzanne says her son is asking her to take out a loan so that he and his wife can buy a home. Their credit isn't good enough to get a loan on their own. Dave advises Suzanne to turn their request down.
QUESTION: Suzanne in New York is calling because her son is asking her to take out a loan so that he and his wife can buy a home. Their credit isn’t good enough to get a loan on their own. Dave advises Suzanne to turn their request down.
ANSWER: Their credit isn’t good enough because they haven’t paid their bills on time. The reason they didn’t pay on time is because they don’t manage money well and they buy things they can’t afford. This house is included in that.
Instead, what they should do is slow way down, get another rental house, pile up cash, finish cleaning up their mess, pay their rental on time for two years and have no debt for that long, and then they’ll be bankable for that house. They can get a regular mortgage in their name. But these people have never slowed down. They’ve always bought things they couldn’t afford with money they didn’t have and they’ve always been disorganized.
That’s not picking on them—that makes them normal. I want them to be excellent instead of normal. Please, please, please do not get them a mortgage. If you take money out of your savings to help them, they are not going to pay you, because their character has not yet healed and they have not yet learned to handle money.
They don’t have a six-month contiguous process that shows they are doing a great job yet. They are jumping the gun again. They need to slow down. Build a base again and grow from there. If they called me, I would recommend they not buy a home until they get their mess cleaned up. Rent something inexpensive and pile up some cash. It’s okay to heal a little bit.