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Loans from Family

Have any of you been offered loans from family members to help buy a home?

Would you accept such an offer? What factors would impact your decision?

If you have ever accepted such an offer in the past, how did it work out? Would you recommend it?

Comments

( 14 comments — Leave a comment )
muliebrity
Apr. 18th, 2009 10:12 pm (UTC)
We are getting "gifts" (for the purposes of FHA) to help with our downpayment. We will immediately pay them back once our tax credit comes in.

I would have felt comfortable taking a loan from my parents regardless since they have put less than $10,000 toward my education/wedding since I left high school compared to the $20,000 minimum they've put into my sister. That may seem petty, but I feel like it's the least they can do since they are quite secure financially and I have never given them a reason to think I wouldn't pay them back.
mrs_dragon
Apr. 18th, 2009 10:17 pm (UTC)
In my family, that's flipped, or at least my brother is c.o.v.i.n.c.e.d that it is and I don't have enough facts to really know. The problem is that I am eldest, so I just assumed they would offer him the same things, now I wonder. I would feel awful adding fuel to that fire.
muliebrity
Apr. 18th, 2009 10:20 pm (UTC)
I can understand that. I'm the oldest, and my parents have always been more accommodating and generous with my sister than with me because she plays her role as the baby of the family very well. Although our relationship is good, I know it can be a source of tension that is hard to resolve. In your case, I would probably avoid taking it unless it was the only solution I had, since your relationship with your brother doesn't have a price tag.
blightology
Apr. 19th, 2009 02:56 pm (UTC)
your relationship with your brother doesn't have a price tag

Nods. I never bothered to run a tot-board WRT my brother (he's 6 years younger than I am). My parents paid for both our college educations, but I had more scholarships so he technically got "more." They bought us both shitty used cars, but his was twice as expensive because I got a compact and he got a pickup (he's a mechanic and needs it). When my gramma passed before she could give him a down payment for a house like she did for me, I just wrote him a check. Why not; he works hard & deserves it.

It's family; it shouldn't be transactional.
belleweather
Apr. 18th, 2009 11:43 pm (UTC)
My mother has offered to gift us with a downpayment, but I think we're going to decline unless we absolutely need it, for a couple of reasons. First, because the stock market has lost half it's value and since my mom is retired that really, really affects her income. If we don't NEED the money I feel like we shouldn't take it.

Secondly, my mom's perspective on us buying a house is totally different from ours -- she really wants us to buy something in a "good" neighborhood for the purposes of resale and isn't on the same page as us as far as what we should spend -- Basically, we want to buy a shabby house in a reasonable neighborhood, make some repairs and spend way less money on housing. Because we'd be saving SO MUCH MONEY on our monthly bills and because we're buying a house that fits us long-term, we're not real concerned about resale value. She wants us to buy a more expensive house in a better neighborhood where she thinks housing with appreciate. Things are tense already, I can't imagine how much MORE tense they'd be if her money were involved.
mrs_dragon
Apr. 19th, 2009 02:33 am (UTC)
Secondly, my mom's perspective on us buying a house is totally different from ours

*nods* When my parents bought their house they were a few thousand dollars short of the downpayment for the house they *really* wanted. So they settled and then, because my dad is Mr "I hate change for any reason", they stayed there for 17 years until an EARTHQUAKE caused enough structural damage that in the end moving was easier than fighting any more with the insurance company.

So now, I think my mom is afraid that we will face the same situation...except we *have* what I think is a totally fine downpayment and even if we had to *settle* it would be for a house we could upgrade over time...

I also agree with you about worrying that my parents need the money more than we do (we both work and are just starting out with few bills, they are close to retirement).
(Deleted comment)
mrs_dragon
Apr. 19th, 2009 02:35 am (UTC)
Thankfully this wasn't even a though that crossed our minds when we were buying our home. I think that, if it had, we'd have waited to buy until we could afford to on our own without parental assistance.

The thought never occurred to me either until my mom made the offer. : ) I think we are going to decline but I was curious what everyone else's experiences were.

ETA: We've saved up 10% downpayement (and will keep saving as we are looking). My mom is apparently concerned that without a full 20% down that we will not be able to get a house we like at a rate we afford.

Edited at 2009-04-19 02:37 am (UTC)
(Deleted comment)
mrs_dragon
Apr. 19th, 2009 02:56 am (UTC)
Yes?

The odd part is that it's my mother who is having the hard time with this. Not my husband or I, who are actually the ones doing the purchasing. : )
(Deleted comment)
blightology
Apr. 19th, 2009 12:31 am (UTC)
My grandmother gave me a small gift when I bought my first home. But I would never accept a loan from anyone except the bank.
mrs_dragon
Apr. 19th, 2009 02:35 am (UTC)
But I would never accept a loan from anyone except the bank.

That's pretty much how I feel. That loans in relationships are a really bad idea.
bluebuckeye
Apr. 19th, 2009 02:54 am (UTC)
I love my parents but knowing my dad any loan that he gave us would have strings attached so we steered clear. They don't really have any money to offer to us so it's kind of a moot point. But we wouldn't take it I don't think even if they did.t
( 14 comments — Leave a comment )

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