My Husband Rents a House Out to His Ex-Girlfriend (Her Payments Are Always Late)

Summary

Podcast Summary: The Ramsey Show Highlights Episode: My Husband Rents a House Out to His Ex-Girlfriend (Her Payments Are Always Late)
Release Date: July 1, 2025
Host/Author: Ramsey Network

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Introduction

In this episode of The Ramsey Show Highlights, Rachel presents a complex personal and financial dilemma involving her husband's decision to rent his home to his ex-girlfriend. The situation has escalated as late rental payments are now jeopardizing their credit score and hindering their ability to qualify for a new mortgage. Experts Dave Ramsey and John delve into the nuances of the issue, offering practical advice and candid opinions to guide Rachel and listeners facing similar challenges.

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The Situation

Rachel begins by outlining the predicament:

"[00:06] Rachel: Hey, at the crux of my question is essentially, my husband owns a home in New Jersey that he rents out to his ex-girlfriend. Whoa, whoa. Yeah."

"[00:25] Rachel: I know. So they. Well, he bought it. It's entirely in his name, both the mortgage and the deed. He bought it in like 2016, 2017. And then, you know, a few years later, they broke up. They do share a child together, so that's kind of where the rental agreement came in. Yeah. So wanted to make sure that, you know, there was limited, like, you know, disruption for his child. So yeah, so he rents out the place to his ex. And now, you know, fast forward a few years. We are trying to get qualified for a home. And the credit report came back and she has been late on payment. So it's affecting our. Our qualification process."

Rachel explains that her husband purchased a home solely in his name and decided to rent it to his ex-girlfriend after their breakup to minimize disruption for their shared child. However, over time, the ex-girlfriend has become consistently late with rent payments, negatively impacting their credit scores and hindering their ability to secure a new mortgage.

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Expert Analysis and Advice

Dave Ramsey and John respond to Rachel's concerns with a blend of empathy and straightforward financial counsel.

• Initial Reaction:

  "[00:20] Dave: Let that marinate for a minute."
  "[00:22] John: You just."
  "[00:22] Dave: Fantastic. Ooh. Okay."

• Identifying the Core Issue:

  "[01:17] Rachel: I know, I know."
  "[01:19] John: I thought X is always did exactly what they said they were going to do."
  "[01:23] Dave: So he's not collecting the rent and paying the mortgage, he's just assuming that she's paying it."
  "[01:28] Rachel: Correct. Yeah."

Rachel clarifies that her husband is not actively managing the rent collection; he's merely assuming that payments are being made on time, which has not been the case.

• George's Interjection: A brief interruption occurs where George promotes the Knockbox service:

  "[02:06] George: Hey, George here... [e-mail] Ramsey that's knockbox.com Ramsey."

  Note: This segment is promotional and not directly related to the main discussion.

• Assessing the Impact:

  "[02:42] Rachel: She's actually like the payments are up to, you know, are up to date. She has just had a history of late payments so in this year alone, right, as of mid-May, she was late on three payments and it's like past the 30-day mark. Right. So it's hitting his credit report and then we did a more extensive credit report and she was late about 20 times over the history of like the last like five or so years that she's been paying."

Rachel provides specifics: in the current year, she's been late three times past the 30-day mark, with a total of 20 late payments over five years, significantly affecting their creditworthiness.

• Dave's Concern:

  "[03:08] Dave: Yikes. So you, you're not getting a house."
  "[03:10] John: Yeah. You aren't getting a house."
  "[03:12] Dave: Not for a while."

The experts express alarm over the sustained impact on Rachel and her husband's ability to qualify for a new home.

• Rachel's Financial Standing:

  "[03:14] Rachel: That's surprisingly enough. Right. We did our credit report and his score isn't as bad as you might expect. Right."
  "[03:23] Dave: Is it?"
  "[03:24] Rachel: He's in. I think it was in like the low sevens."
  "[03:28] Dave: Okay. Yeah, that's not as bad as I would expect."

Despite the challenges, Rachel notes that her husband's credit score remains relatively strong, situated in the low 700s—a fact that even surprises their lender.

• Advice to Move Forward:

  "[03:53] John: I would sell."
  "[03:54] Dave: Yeah, you got to sell the house and let her get her own space. It's been how many years?"
  "[03:59] John: Five years."
  "[04:01] Rachel: Since been married and they hit. Her and her new husband have a child together. Oh gosh."
  "[04:07] John: Yeah."
  "[04:07] Dave: This is overdue. Yeah, that's long overdue."

John and Dave unanimously agree that the situation has extended far beyond a reasonable timeframe—five years—and it's imperative to take decisive action by selling the property to mitigate further financial strain.

• Potential Solutions:

  "[04:34] John: Or if there's, if there's an incredible. I'm making up a number here, but let's say the house is worth 500 grand and he's got $200,000 in equity. If he wanted to make them just a stupid deal on it to let them buy it as like a gift to his daughter or something like that, he could do that. Y' all got to sell the house."

John suggests exploring options such as selling the house or offering it at a discounted rate as a settlement to free both parties from the ongoing financial and personal entanglements.

• Addressing Financial Responsibility:

  "[05:00] Rachel: And that's, that's the other thing where it, like, you know, conscious of. Because. Right. If she can't, like, for context, to like the house, the mortgage payment is like eleven hundred dollars a month. Right. And it's like, you're late on that. You know, the last thing that I think he wants to do is. And he's not responsible for their finances, so, like, understand that. But the last thing he wants to do is kind of like throw them out. You know what I mean?"

Rachel emphasizes the complexity of the situation, highlighting her husband's reluctance to forcefully evict the ex-girlfriend, considering the shared responsibility due to their child.

• Firm Stance on Financial Boundaries:

  "[06:05] John: A month, 30 days."
  "[06:07] Dave: Exactly. What."
  "[06:08] John: What's the custody arrangement with daughter?"
  "[06:11] Rachel: Every other weekend."
  "[06:12] John: Okay. Every other weekend. So she stays almost all the time with. With mom. How come."
  "[06:20] Rachel: You know, that was an agreement when they first broke up? Because he was working, you know, two jobs and like he, you know, insane hours. And so that was kind of what they agreed on then. And. But that's kind of. Yeah. Outdated as well."
  "[06:36] Rachel: Yeah."
  "[06:38] Rachel: Yeah."

John probes into the custody arrangement, revealing that their daughter spends most of her time with her mother, which adds another layer to the financial and personal dynamics.

• Personal Responsibility and Final Recommendations:

  "[07:21] John: Okay. And I can't breathe right. If I'm away from my daughter for more than three or four Days, call me a sucker, I don't care. I don't like it when I'm on the road for two weeks at a time. I, I just, I get out of sorts. And so if he is okay seeing his daughter every other weekend, I'm more power to you. I couldn't live like that."
  "[07:21] Dave: That's right."
  "[07:21] John: Okay. And I can't breathe right. If I'm away from my daughter for more than three or four Days, call me a sucker, I don't care. I don't like it when I'm on the road for two weeks at a time. I, I just, I get out of sorts."
  "[08:00] Rachel: Right."
  "[08:10] Dave: Yeah. Because you're right. If they're struggling with eleven hundred dollars on this rent, they're struggling, struggling, but they really again."
  "[08:18] John: Or they're struggling. But you know why? Because they can."
  "[08:20] Dave: Yeah, exactly."
  "[08:22] Rachel: Yeah. I don't know. Yeah. How much of that? Because it's not like obviously with the, with the mortgage being only in his name and everything, she wasn't the most financially responsible because she didn't have to be."
  "[08:34] Dave: You've been the safety net there this whole time. But John is exactly right. You have a stake in this. And y' all sit down, you sit down together and say this is what we want. This has been going on long enough. It's been five years for crying out loud. They're okay to go out on their own. And yeah, I am with you, John. I don't."
  "[08:51] John: I could never see walk through that house and I put on the market sooner rather than later."
  "[08:56] Rachel: Create your free every dollar budget today."
  "[08:58] Dave: The simplest way to budget for your life."

John underscores the importance of personal well-being and financial independence, advocating for end decisively the arrangement to reclaim their financial stability. Dave reinforces the need for Rachel and her husband to confront the issue head-on rather than allowing the situation to persist.

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Key Takeaways

1. Assessing Financial Arrangements: It's crucial to evaluate when personal rental agreements become detrimental to your financial health, especially when shared past relationships are involved.

2. Setting Boundaries: Maintaining clear financial boundaries is essential to prevent past relationships from negatively impacting your current financial stability.

3. Decisive Action: Prolonged financial arrangements that are not functioning as intended may necessitate significant changes, such as selling property, to safeguard one's financial future.

4. Personal Well-being: Balancing financial decisions with personal well-being and family dynamics is vital. Ensuring that financial arrangements do not compromise personal relationships or family stability is paramount.

5. Seeking Expert Advice: Consulting financial experts can provide clarity and direction in complex situations, helping individuals make informed and effective decisions.

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Conclusion

In this episode, Rachel's situation serves as a compelling case study on the intersection of personal relationships and financial responsibilities. Dave Ramsey and John provide a candid and pragmatic approach, emphasizing the importance of proactive financial management and the willingness to make tough decisions for long-term stability. Listeners are encouraged to assess their own financial arrangements critically and seek expert advice when faced with similar dilemmas.

For more personalized budgeting tools, listeners are reminded to check out the EveryDollar app, as mentioned at the beginning of the episode.

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Notable Quotes:

• Rachel on the predicament:
  "[00:06] Rachel: ... my husband owns a home in New Jersey that he rents out to his ex-girlfriend."

• John on taking action:
  "[03:53] John: I would sell."

• Dave on resolving the issue:
  "[08:22] Rachel: ... y' all sit down together and say this is what we want. This has been going on long enough. It's been five years for crying out loud."

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This comprehensive summary encapsulates the key discussions, expert insights, and actionable advice presented in the episode, providing valuable guidance for listeners navigating similar financial and personal challenges.

Transcript

[Rachel]

Brought to you by the EveryDollar app.

[Dave]

Start budgeting for free today.

[Rachel]

Hey, at the crux of my question is essentially, my husband owns a home in New Jersey that he rents out to his ex girlfriend. Whoa, whoa. Yeah.

[Dave]

Let that marinate for a minute.

[John]

You just.

[Dave]

Fantastic. Ooh. Okay.

[Rachel]

I know. So they. Well, he bought it. It's entirely in his name, both the mortgage and the deed. He bought it in like 2016, 2017. And then, you know, a few years later, they broke up. They do share a child together, so that's kind of where the rental agreement came in. Yeah. So wanted to make sure that, you know, there was limited, like, you know, disruption for his child. So yeah, so he rents out the place to his ex. And now, you know, fast forward a few years. We are trying to get qualified for a home. And the credit report came back and she has been late on payment. So it's affecting our. Our qualification process.

[John]

You don't say. No way.

[Rachel]

I know, I know.

[John]

I thought X is always did exactly what they said they were going to do.

[Dave]

So he's not collecting the rent and paying the mortgage, he's just assuming that she's paying it.

[Rachel]

Correct. Yeah.

[John]

Oh, amazing. This is so great.

[Dave]

Okay. Okay. And let me say, I kind of get that he was probably like, I don't want to have to be involved in this if I don't have to be.

[John]

Right.

[Dave]

Like limit contact kind of thing.

[Rachel]

But that's exactly it. So it wasn't a fun breakup. And so that's a part of the. The dynamic here. Right. One, he wants to obviously be low conflict, do what's best for his. His child in the situation. So just keep that in mind.

[Dave]

Right.

[Rachel]

Like that where his intention was. So that, that's kind of the situation we're in. Right.

[Dave]

So how far behind is she?

[George]

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[Dave]

So how far behind is she?

[Rachel]

She's actually like the payments are up to, you know, are up to date. She has just had a history of late payments so in this year alone, right, like as of mid May, she was late on three payments and it's like past the 30 day mark. Right. So it's being, it's hitting his credit report and then we did a more extensive credit report and she was late about 20 times over the history of like the last like five or so years that she's been paying.

[Dave]

Yikes. So you, you're not getting a house.

[John]

Yeah. You aren't getting a house.

[Dave]

Not for a while.

[Rachel]

That's surprisingly enough. Right. We did our credit report and his score isn't as bad as you might expect. Right.

[Dave]

Is it?

[Rachel]

He's in. I think it was in like the low sevens.

[Dave]

Okay. Yeah, that's not as bad as I would expect.

[Rachel]

Right, exactly. And that's what the lender said as well, you know, that he was really surprised. But it goes to show you that he is on top of his finances with the exception of this situation. So, so what's your question? Yeah, yeah, my question for you is what do we, like, what would be your advice in the situation? To move on from the, from it? Right.

[John]

I would sell.

[Dave]

Yeah, you got to sell the house and let her get her own space. It's been how many years?

[John]

Five years.

[Dave]

Yeah, yeah.

[Rachel]

Since been married and they hit. Her and her new husband have a child together. Oh gosh.

[John]

Yeah.

[Dave]

This is overdue. Yeah, that's long overdue. And, and, and I wouldn't make a big drama about it. I wouldn't go talk about the past missed payments and I would just say, hey, it's been five years. I think we've all moved on. I think we're all in a good place. And honestly, we're about to buy a house anyway, so we need to clear this out. We're going to, and give, give them the right amount of time. We're going to be selling the house in six months or you know, give them a window to get out of there and then sell it.

[John]

Or if there's, if there's an incredible. I'm making up a number here, but let's say the house is worth 500 grand and he's got $200,000 in equity. If he wanted to make them just a stupid deal on it to let them buy it as like a gift to his daughter or something like that, he could do that. Y' all got to sell the house. It sounds like if she's late 20 times over the course of five years, she's got other issues financially. Right.

[Rachel]

And that's, that's the other thing where it, like, you know, conscious of. Because. Right. If she can't, like, for context, to like the house, the mortgage payment is like eleven hundred dollars a month. Right. And it's like, you're late on that. You know, the last thing that I think he wants to do is. And he's not responsible for their finances, so, like, understand that. But the last thing he wants to do is kind of like throw them out. You know what I mean?

[Dave]

And, you know, throwing them out, you're giving them five, six months to. To get their own space. And it's fair. He owns the house.

[John]

But I personally wouldn't wait five or six months just because I don't trust what they would do to the house. Or they might just stop paying on it altogether.

[Dave]

And they might. And if that. You can stipulize all that. Like, that can all be stipulations in how you do this. But the point is you're giving them a fair amount of time to find something new. And if you find that they are not holding up their end of the deal. Yeah. You accelerate that process and you can let them know that ahead of time. We're telling you this out of good faith because we love this daughter and we care about making sure you land on your feet. Now if you abuse that, then we'll accelerate this and you'll be out In.

[John]

A month, 30 days.

[Dave]

Exactly. What.

[John]

What's the custody arrangement with daughter?

[Rachel]

Every other weekend.

[John]

Okay. Every other weekend. So she stays almost all the time with. With mom. How come.

[Rachel]

You know, that was an agreement when they first broke up? Because he was working, you know, two jobs and like he, you know, insane hours. And so that was kind of what they agreed on then. And. But that's kind of. Yeah. Outdated as well.

[John]

Yeah. So.

[Rachel]

Yeah.

[John]

Here's. Here's the broader picture for me is this. He doesn't have an obligation to that mother or that her new stepdad. That's their. That's their responsibility to figure that out. And what I'm going to say is going to sound harsh, and I don't mean for it to sound harsh, but you and him, by the way, this house is yours too. It's Yalls. Okay. And y' all need to decide what kind of life y' all want to live to. To. To have. Right. And I wouldn't personally want my wife's ex boyfriend five years later still messing up my financial life.

[Dave]

That's right.

[John]

Okay. And I can't breathe right. If I'm away from my daughter for more than three or four Days, call me a sucker, I don't care. I don't like it when I'm on the road for two weeks at a time. I, I just, I get out of sorts. And so if he is okay seeing his daughter every other weekend, I'm more power to you. I couldn't live like that. And so it may be we're going to revisit a whole bunch of things. And if her new stepdad and her bio mom cannot afford to find a place to live, cannot afford groceries, I'm going to have a different conversation with them and the courts about my daughter's well being and safety.

[Rachel]

Right.

[John]

But I'm not going to burn down my financial life supporting somebody that has no interest in supporting themselves.

[Dave]

Yeah. Because you're right. If they're struggling with eleven hundred dollars on this rent, they're struggling, struggling, but they really again.

[John]

Or they're struggling. But you know why? Because they can.

[Dave]

Yeah, exactly.

[Rachel]

Yeah. I don't know. Yeah. How much of that? Because it's not like obviously with the, with the mortgage being only in his name and everything, she wasn't the most financially responsible because she didn't have to be.

[Dave]

You've been the safety net there this whole time. But John is exactly right. You have a stake in this. And y' all sit down, you sit down together and say this is what we want. This has been going on long enough. It's been five years for crying out loud. They're okay to go out on their own. And yeah, I am with you, John. I don't.

[John]

I could never see walk through that house and I put on the market sooner rather than later.

[Rachel]

Create your free every dollar budget today.

[Dave]

The simplest way to budget for your life.