I don't know, why you'd like to use someones files from within his/her home directory. I always resort to making all homes 700 - really private.
I consider it good style to create a dedicated common place for files to share like /pub owned by a common users group with suitable permissions, set-group-id and even sticky-bit set.
If you absolutely need/insist to carry on with your home directory permissions: You've made sure, that the 777 is not the fault itself, haven't you? Not only that you might not need execute-permission *), it may even make some checks for strict/suitable file permissions fail ...
Just my 2 cents. :-)
*) ... and you shouldn't make more files executable that the absolute minimum (typically governed by your Ubuntu's default installation, if there is not a current, urging need to do so. Use dpkg-statoverwrite to make permanent, reproduce-able changes to local dir/file permission settings, assuming you have this call on your systems (works on Debian, the base of Ubuntu).
If this doesn't help too much, I' ll require to know more about what file you're trying to source for what purpose to get a better clue. For now I wish you good luck.