Sounds like I am better off just dealing with the mortgage company and not take up on the “offer”. Lot of great pointer here…!!!
ws Wrote: ------------------------------------------------------- > Sounds like I am better off just dealing with the > mortgage company and not take up on the “offer”. > Lot of great pointer here…!!! Depends. If you can get an unlimited forbearance (and hopefully interest rate reduction at that point) in case of a job loss, in writing, as a part of the promissary note or agreement, that could be a good deal. If everything is legal and contractually agreed upon, they have no more influence on you than the bank.
it sounds like your in-laws perceive that you are not doing so well financially and your future prospects are not as bright at this point in time. so they are trying to help you out and in the process help their daughter (or son). maybe they are just looking out for their offspring and grandkids.
bernie_m Wrote: ------------------------------------------------------- > ws Wrote: > -------------------------------------------------- > ----- > > Sounds like I am better off just dealing with > the > > mortgage company and not take up on the “offer”. > > > Lot of great pointer here…!!! > > > Depends. If you can get an unlimited forbearance > (and hopefully interest rate reduction at that > point) in case of a job loss, in writing, as a > part of the promissary note or agreement, that > could be a good deal. If everything is legal and > contractually agreed upon, they have no more > influence on you than the bank. Technically you may be right, but if this actually comes to pass with your yield seeking in-laws, I wouldn’t want to be around. And they have far more influence than the bank. Just not in a court of law. ; )
mwvt9 Wrote: ------------------------------------------------------- > And they have far more influence than the bank. > Just not in a court of law. ; ) Heck yeah, I agree with that.
if they are giving you the dough to pay off your mortgage and there are no formal agreements made, if and when they pass, god forbid, that debt will basically be forgiven. you get your house paid off free! one upside for you to go with all of the obvious negatives put forth by the rest.
would you be able to deduct the interest?
This just doesn’t seem terribly advantageous to you compared to the current situation. Maybe they can offer better forbearance terms if you lose your job, that’s about it. But the appropriate comparative question is: if you lost your job, and they had $190k in CDs, would your in-laws be willing to help you (and their child) make rent payments during difficult times? If the answer is yes, there’s not much difference from your point of view; if the answer is no, how much more power do you want to give them over you? This may also make them feel more entitled to tell you what you can and can’t do with your home - more entitled than a bank or servicer would. What if you don’t like the deal and want to refinance to get out of it? Will they let you? What kind of family resentments would that cause if you did? I would think that they should cut you a break on the interest rate at the very least in order to sweeten the deal for you. Personally, I think it’s best to try to keep family stress and financial stress as uncorrelated as possible.
mpnoonan Wrote: ------------------------------------------------------- > would you be able to deduct the interest? dlpicket said I still can, I need to find out from my CPA…I don’t want to short change my in-laws, however, given the emtional factors that may come up in the future, I would probabaly decline the offer, now, how can I tell them so they don’t think I am preparing for a divorce is the trick.
This sounds like a terrible idea to me. Maybe this is a cultural thing, but I’ve never heard of anything like this before. As others have said there are tax complications to doing this. What kind of contract will you draw up? Do you want to be beholden to your inlaws like that? I would run a million miles away from that. It sounds like its a well intentioned offer from your inlaws, but really I would politely decline and advice them to invest their money elsewhere. If they really want to help you out financially, then why not wait to see if you do get laid off. If that does happen and you are at risk of default, then maybe they could cover your payments for a few months until you get a job and then you can repay them. That seems much better and vastly less hassle than what they are suggesting. Again, I think there must be a cultural divide here because I can’t imagine a European or American family suggesting this.
Carson Wrote: ------------------------------------------------------- > This sounds like a terrible idea to me. Maybe this > is a cultural thing, but I’ve never heard of > anything like this before. As others have said > there are tax complications to doing this. What > kind of contract will you draw up? Do you want to > be beholden to your inlaws like that? > > I would run a million miles away from that. It > sounds like its a well intentioned offer from your > inlaws, but really I would politely decline and > advice them to invest their money elsewhere. > > If they really want to help you out financially, > then why not wait to see if you do get laid off. > If that does happen and you are at risk of > default, then maybe they could cover your payments > for a few months until you get a job and then you > can repay them. That seems much better and vastly > less hassle than what they are suggesting. > > Again, I think there must be a cultural divide > here because I can’t imagine a European or > American family suggesting this. Funny you mention this, I was going to say the same thing. It’s an Asian thing from my experience.
ws Wrote: ------------------------------------------------------- > For example, I can get on > the phone and “yell” at the customer service rep > of a mortgage company if they make some mistake, > however, I can’t really yell at my in-laws if > mistake happens. This is one of the worst reasons for making a decision like this. My gf has the same rationale with wedding planners, she wants to hire a professional wedding planner instead of my sister-in-law because she said wanted the freedom to “yell” at the planner. So basically she wants to blow an additional $20,000+ to be able to lose her temper at someone. Really stupid.
Yeah, I guess the idea is that it simultaneously satisfies the child’s obligation to support their elders after a certain age while it allows the parents to feel that they are doing the kids a favor on their home at the same time. Does sound a bit Asian to me. Not the typical Anglo individualist ethic we see here (no judgements about which is better - just an observation of how it makes sense in one framework but not so much in another)
JohnThainsLimoDriver Wrote: ------------------------------------------------------- > ws Wrote: > -------------------------------------------------- > ----- > > For example, I can get on > > the phone and “yell” at the customer service > rep > > of a mortgage company if they make some > mistake, > > however, I can’t really yell at my in-laws if > > mistake happens. > > This is one of the worst reasons for making a > decision like this. My gf has the same rationale > with wedding planners, she wants to hire a > professional wedding planner instead of my > sister-in-law because she said wanted the freedom > to “yell” at the planner. So basically she wants > to blow an additional $20,000+ to be able to lose > her temper at someone. Really stupid. I agree it is a stupid reason, however, I am trying not to be “hostaged” by my in-laws. Oh, BTW, my mother-in-law is asian.
While it seems reasonable you probably don’t want the stress on the marriage. Given the situation if everything goes well fine but if there are any hicups then it is going to be way to complicted. I understand the cultural angle here as well. What if you want to move because you get a better job, what if they die, what if you get divorced, what if you get disabled and can’t work … what if… what if… Everybody’s all fine and good until something happens. Things happen I hope not to you but they do happen to people everyday. There are so many other variables. Are they billionaires and this is just thier way of giving you the money without actually just giving it to you … different situation.
Don’t do this please. My brother did something similar with a relative and when the relative had financial problems they tried to pressure my brother to sell his house to pay back some of the loan. You are much better off having a regular mortgage and it is not your responsibility to given your in-laws a return that is higher than what they can get in a CD. Worry about the job loss if it actually happens.
Keep your mortgage and short financials as a hedge against losing your job.
Considering that you are financially stable and they are too worried about losing their money, it can be a good deal for both. Pros === 1) In-laws will not gamble their money in buying your TARP bank stock or something like that 2) You don’t have to give away interest to a non worthy bank 3) There wont be a foreclosure by bank on your home Cons === 1) You all have to come to an agreement about what to do if you lose your job. You will continue to pay or suspend payments etc 2) Have a plan in place for what happens if you dont have a job for the next 10 years and you cant payback at all 3) Plan for pre-payment 4) Plan for what happens if your in-laws need money for urgent need (huge medical bill etc)
Thank all of you so much for your pointers, advices and what-ifs. They are all very helpful. So far, I am leaning toward to keep my current mortgage with my mortgage company. Like many of your have said, there isn’t too much upside benefits, however, I know it will certainly put lot of stress among family memembers. Once again, thanks!!!
Actually, I tried to get my brother to buy an apartment for me and I would pay him a mortgage. He’s got enough money to buy several of my apartments and I would rather my interest payments go to him than a bank.