I’m 17 and have two older siblings who are currently in college. Both of my parents are not working right now. In the past they had successful careers and together they own over $8M in real estate (homes in Charleston SC, Martha’s Vineyard MA, Washington DC, and Greenwich CT).
The problem is that we don’t currently have enough liquid cash to cover the expenses for all of these properties and my siblings’ college tuition. I’ll also be starting college next year. We have very little savings right now.
I’m trying to talk to my mom about whether taking out a home equity loan or HELOC on one of the properties makes sense to help cover expenses right now. At the same time, I’m worried because some of these homes may not have been smart purchases given our current situation, and my parents have never been great with financial planning.
My parents also aren’t able to work or get jobs right now, so increasing income isn’t really an option either.
Is using home equity in a situation like this generally a bad idea? Are there better options I should be thinking about or is this something that makes sense?
17 y/o worried about family finances
byu/chibalenelson2 inRealEstate
Posted by chibalenelson2
4 Comments
Sell the properties ?
If they don’t have enough income to support the family, then they shouldn’t take out a HELOC. A home equity loan carries high-interest and they would immediately need to start making payments on it.
I’m sorry you’re having to deal with this at only 17, but it’s hard to have much sympathy for people who own houses in these places. It’s time for your parents to sell one or more properties.
Do you know where you’re going to college? Is money set aside for college or was the plan to pay it out of regular income? Have you applied for financial aid? If not, get going on it now.
We don’t know why both of your parents aren’t working, but the question is if you have a family friend or a relative that can help advise your family as it sounds like nobody’s in charge. I’m sorry you have so much on your shoulders. There are financial advisors or an accountant who could advise. There seems something very wrong with the situation that they aren’t being parents and you have to worry about all of this. If it comes down to it if you are in school, you should speak to your counselor about ways to help you be safe to make sure you have a roof over your head or if there is a relative that can be supportive to you.
I’m sorry you’re dealing with this at 17. Judges and attorneys will approve a sale during a divorce if it needs to happen.
My mom advice to you, reach out to your siblings and tell them your concerns. Then have a family conversation and put all the cards on the table.