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Buying a house, unique situation

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  • #31










    I’m actually quite curious if people actually had the opportunity in front of them, how many would actually turn down this gift?

    It is my belief that we would fall victim to thinking we are smart and hard working and could work out the emotions favorably.

    however, for interesting conversation, let’s play it forward.  if someone gifted you a whole house, does that mean you would retire at a younger age?  if you retired in your 40s, would your father in law’s (still living let’s assume) opinion of you change?  or is it just accepted when you reach a certain level of wealth, that you have demonstrated your work ethic and intelligence, and retiring at 40 to live off family money and your hard earned money is a (rich person’s) cultural norm?

     

     

     
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    I have turned down many gifts like this.  I think my FIL pities us because I work hard, and we lead modest lifestyles.  FIL is often offering cash for home improvements/bigger house, cars, etc.  He gave my wife’s sister a loan for their house.  At some point, people need to grow up and handle their family responsibilities on their own.  Maybe once they do that, they can go back to getting handouts from mommy and daddy.
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    take the gifts you fool!

    you’re one of the smartest guys here, and i appreciate your viewpoint.  and your mad spreadsheet skillz but that’s another discussion.

    i think there is a gap between home improvements and early retirement.  let’s assume for the sake of discussion, the father in law doesn’t need the money at all.  zero.  his lifestyle is not affected in the least.

    will you turn down the eventual inheritance as well for the same reasons?  or if receiving the inheritance, not use it at all? does anyone make it on their own?  you are gifted with genetic intelligence and being born into a family and hopefully supportive environment.  you found the right spouse.  your kids will have opportunities you didn’t have.  where do we draw the line between being supportive versus enabling?

     
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    I hope they eventually spend it on themselves or donate it.

    I think that getting accustomed to a lifestyle that you can’t afford and is enabled through gifts like these will ultimately lead to unhappiness and family drama when the gifts that are relied upon to fund this lifestyle stop flowing or expectations aren’t met.

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    • #32










      I’m actually quite curious if people actually had the opportunity in front of them, how many would actually turn down this gift?

      It is my belief that we would fall victim to thinking we are smart and hard working and could work out the emotions favorably.

      however, for interesting conversation, let’s play it forward.  if someone gifted you a whole house, does that mean you would retire at a younger age?  if you retired in your 40s, would your father in law’s (still living let’s assume) opinion of you change?  or is it just accepted when you reach a certain level of wealth, that you have demonstrated your work ethic and intelligence, and retiring at 40 to live off family money and your hard earned money is a (rich person’s) cultural norm?

       

       

       
      Click to expand…


      I have turned down many gifts like this.  I think my FIL pities us because I work hard, and we lead modest lifestyles.  FIL is often offering cash for home improvements/bigger house, cars, etc.  He gave my wife’s sister a loan for their house.  At some point, people need to grow up and handle their family responsibilities on their own.  Maybe once they do that, they can go back to getting handouts from mommy and daddy.
      Click to expand…


      take the gifts you fool!  ????

      you’re one of the smartest guys here, and i appreciate your viewpoint.  and your mad spreadsheet skillz but that’s another discussion.

      i think there is a gap between home improvements and early retirement.  let’s assume for the sake of discussion, the father in law doesn’t need the money at all.  zero.  his lifestyle is not affected in the least.

      will you turn down the eventual inheritance as well for the same reasons?  or if receiving the inheritance, not use it at all? does anyone make it on their own?  you are gifted with genetic intelligence and being born into a family and hopefully supportive environment.  you found the right spouse.  your kids will have opportunities you didn’t have.  where do we draw the line between being supportive versus enabling?

       
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      It depends on the reasons why, in that case it seemed framed as "you're not providing enough let me do the work", which of course is entirely different. The OP framed it as its something he did for each kid and hopefully irrespective of their situation.

      Comment


      • #33




        I’m actually quite curious if people actually had the opportunity in front of them, how many would actually turn down this gift?
        Click to expand...


        The OP has a combination of a gift (100K) and a loan (400K).

        If it were me I would tell my FIL to gift $100K to my wife and let her then discuss with me on how best to use it ( down payment on house, new car for her etc).

        As regards to a loan, I would refuse it. I would never want to ever be in a situation where I am indebted to him. Should I choose to work less or retire early or take nice vacations I would not want him to make smartalec comments on how his money has helped me do all those things. Even if it was inadvertent or he comments to his friends and it trickles back to me. I have too much ego and pride for that.

        He can always leave money to his daughter or grandchildren when he kicks the bucket.

         

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        • #34







          I’m actually quite curious if people actually had the opportunity in front of them, how many would actually turn down this gift?
          Click to expand…


          The OP has a combination of a gift (100K) and a loan (400K).

          If it were me I would tell my FIL to gift $100K to my wife and let her then discuss with me on how best to use it ( down payment on house, new car for her etc).

          As regards to a loan, I would refuse it. I would never want to ever be in a situation where I am indebted to him. Should I choose to work less or retire early or take nice vacations I would not want him to make smartalec comments on how his money has helped me do all those things. Even if it was inadvertent or he comments to his friends and it trickles back to me. I have too much ego and pride for that.

          He can always leave money to his daughter or grandchildren when he kicks the bucket.

           
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          just out of curiosity is it different if it is your parent versus inlaw (outlaw?) parent?

           

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          • #35


            just out of curiosity is it different if it is your parent versus inlaw (outlaw?) parent?
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            Yes. For my parents I have a 20-30+ year experience of them raising me and knowing their behavior and personality and them knowing mine. So I can clearly know if I can accept my father's money or not.

            I don't have that knowledge with my FIL and so I will not accept it directly. I will leave it to my wife to decide if she wants to take that chance or not.

            Comment


            • #36
              Leave the gun. Take the cannoli.

              (Refuse the loan. Take the cash.)

              Comment


              • #37





                just out of curiosity is it different if it is your parent versus inlaw (outlaw?) parent? 
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                Yes. For my parents I have a 20-30+ year experience of them raising me and knowing their behavior and personality and them knowing mine. So I can clearly know if I can accept my father’s money or not.

                I don’t have that knowledge with my FIL and so I will not accept it directly. I will leave it to my wife to decide if she wants to take that chance or not.
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                Yes, better articulated. I would let her take whatever, thats up to her. Keep yourself out of it, meaning any future issues/benefits directly as well.

                Comment


                • #38
                  I am now in the position of the "rich old man" who could offer this kind of money to the kids.  I am fine giving a gift, but would never offer a loan.  Our child's partner might feel like we are insulting their independence.  Too many complications and emotional baggage can stem from that type of family loan.

                  So 100k for help with a house downpayment, sure.  A generous gift, no strings.  Well, maybe some strings along the lines of we would love for you to live somewhere close by, hahah.  A mortgage like loan, no way.  But just one man's opinion....

                  Comment


                  • #39
                    These types of transactions have come up from time to time over the years for my spouse and I.  Our parents know who we are and I know who they are, I would probably consider the loan as it'll not only save some money but more so the hassle of dealing with banks and a mortgage.  You're concerned about independence but you got some family help for school, have you paid them back for that or consider it in your quest for FI?  IMO, the best thing to do when you accept things like this is to pay it forward to your children or to the parents if they need help in the future (financially or otherwise).  Having said that, the downpayment doesn't seem uncommon coming from a wealthy parent.  A 400k 10yr loan interest is about 80k so you could consider it an additional 80k 'gift' from him.  That won't make or break your FI goals.  If you do take the loan but feel guilty, you could pay it back quicker or even tack on an extra bit at the end to account for the interest.  You could also take a 500k loan instead of 100k downpayment and 400k loan, so the 'gift' is ~100k of interest not paid.  If he does have to collect a little interest from you then that'll probably make you feel a little better but still save you from the hassle of banks and such.

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                    • #40
                      I loaned my brother a 250k  short term loan when he bought a house. I told him I didn't want any interest. He returned the money 2 years later with a 0.1 over LIBOR rate as recommended by his accountant. I then used that interest to buy something for his house.

                      If I was in a position to benefit from a 100k gift as a down payment for a house from my father in law, I'd take it. I'm sure it makes him happy to give money to his daughter. But the loan for the other 400K falls in a very gray area. I would go with a conventional mortgage from a bank. If he wants to give more money to his daughter or grandchild in the future, I will not stand in his way.

                      I have just one child. I would be very happy to pay for a down payment for her house. But I realize how it can strain relationships. I don't want my SIL to feel that I think I now own him because I gave them money. So I can see both sides of this deal and in the end it all comes down to individual preference. There is no one way to do this as everyone has a different relationship with their in laws. Some are just cordial, others are really like family and very close knit. Where does your relationship stand with your in laws?

                       

                       

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                      • #41
                        It's a tough call, but I would do it since OP has the means to buy the house

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