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  • #16
    If it’s a straight gift then do it. But otherwise it’s an absolute no way. I live in a 70 year old house. It’s a great place. We’ve put a lot of work into it with our projects. The joys of home ownership.

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    • #17
      I agree with others. Say no. You are not their bank. Maybe I'm more harsh but I also wouldn't gift them the $100K because if you do that won't be the last time they come to you for a cash gift. They need a dose of financial reality.

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      • #18
        Kdeva I believe you have been posting about how buying an expensive house in a VHCOLA area is a financial stretch for you. You cannot afford to gift this money to a sibling. I once loaned my brother money for a down payment and it caused some resentment. Be careful.

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        • #19
          serious question: is this a joke?

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          • #20
            Tough spot as it sounds like you and your sibling have a loving relationship. Is their current living situation bad enough to move now? What's the rush to get in to a good school district if they don't currently have kids? Can they not continue their current living situation for a few more years and save up? If so, and if you decide to help a couple of years from now then hopefully it'll be a much smaller amount and they've made strides in the right direction financially. We've helped family members here and there and have no issue doing so as long as they're doing their part.

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            • #21
              Did you not just post about trying to buy your own place for >3.5X costing north of 2.5M

              And yet you are here asking if you can lend ( which will never be repaid) the money that you need for your own family.

              The answer is NO.

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              • #22
                Originally posted by Hatton View Post
                Kdeva I believe you have been posting about how buying an expensive house in a VHCOLA area is a financial stretch for you. You cannot afford to gift this money to a sibling. I once loaned my brother money for a down payment and it caused some resentment. Be careful.
                That's right, we are also looking for a house and my husband and I are arguing about <2x (him) to 2.5x (me) mortgage on the house we want to buy. We have a sizable nest egg also. That's one reason why the 3.5x mortgage with almost no savings seems crazy to me. As people point out, I know what is right but very hard to keep emotions separate from logic.

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                • #23
                  Originally posted by MPMD View Post
                  serious question: is this a joke?
                  I wish it were This came out of the blue and I had no idea my sibling was even looking for a house. The timing and the request were strange since I am also looking for a house.

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                  • #24
                    Originally posted by Ozarka View Post
                    Tough spot as it sounds like you and your sibling have a loving relationship. Is their current living situation bad enough to move now? What's the rush to get in to a good school district if they don't currently have kids? Can they not continue their current living situation for a few more years and save up? If so, and if you decide to help a couple of years from now then hopefully it'll be a much smaller amount and they've made strides in the right direction financially. We've helped family members here and there and have no issue doing so as long as they're doing their part.
                    My sibling and I are very close and that makes this very hard. I don't know what the reasons for buying currently are. I think there is some pressure from some my siblings social circle since they all bought homes recently. They are currently renting.

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                    • #25
                      Originally posted by Kamban View Post
                      Did you not just post about trying to buy your own place for >3.5X costing north of 2.5M

                      And yet you are here asking if you can lend ( which will never be repaid) the money that you need for your own family.

                      The answer is NO.
                      We are considering a mortgage between <2x (husband) and 2.5x (me) our income and we are still deciding.

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                      • #26
                        Can you give me a "loan" please? I really, really love this private island for sale in the Caribbean.

                        Seriously though, I've never been in this predicament with family. However, if I ever get involved I would know I was essentially gifting and would budget accordingly, even if I told the recipient it's a loan. If they can't afford the down payment and mortgage thru a lender, I don't think a 0% bridge loan from you is likely to make the difference in affordability if you're expecting the money back.

                        Your sibling knows the lender will take the property for default, and also knows you won't. Incentives for repayment are different on the two loans. Charging interest and late penalty are incentives for timely repayment, your emotions will likely prevent you from including that in a contract?

                        Plan privately on a gift to preserve the relationship, and subtract that amount from the down payment available on the home you are planning on buying. Don't financially plan on their repayments to help you cover your own expenses. Odds are statistically high you'll be disappointed on the back end so know what to expect on the front end if you want to call it a "loan". Any unpaid portion can at least be written off as bad debt against your taxes when the likely default occurs, unless the IRS disallows that. IRS rules on business transactions between family members are different and more stringent than otherwise. If the IRS allows it, it will become a taxable event for your sibling.
                        Last edited by EntrepreneurMD; 10-06-2020, 11:22 AM.

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                        • #27
                          Clearly you can't afford to give them a loan, which will make it easier to not loan a relationship-ending amount or gift a financially strangling (to them) amount.

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                          • #28
                            A 20 year old house today will be a 30 year old house in a decade. Keep that checkbook out.

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                            • #29
                              Originally posted by VagabondMD View Post
                              The answer is no.

                              Since they do not have kids, they should continue to rent, save money, and perhaps improve their income. When they have kids ready to enter kindergarten in 5+ years, they may be in a better financial position to afford the house that they want now. Or maybe not, but that is not your problem.

                              PS Your husband is a saint. There is no way that I would go along with this for a sibling of my wife.
                              ^^ this.

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                              • #30
                                Originally posted by kdeva View Post

                                I wish it were This came out of the blue and I had no idea my sibling was even looking for a house. The timing and the request were strange since I am also looking for a house.
                                well obviously i would give this the hard pass.

                                honestly you might seek some counseling about this relationship, it is unhealthy. it sounds like you have a great deal of investment in this person and they are very comfortable taking money from you. this screams boundary issues that might be pushed/exploited at a time when the stakes are higher for them and the stress is higher for you.

                                what do i mean? fast forward 10 years, they are in some kind of self-engineered calamity and you are not in a position to help them for whatever reason. they are going to ask you for money (they've proven themselves capable of asking for an enormous sum of money already) and if you are unable to "help" they are likely to respond with anger which you may be unprepared to manage. so instead of "hey we'd like to push our budget and we know you have the money" it will be "dammit if you don't give us $50k we lose the house and the kids are out on the street and if you loved me you'd do this" and next thing you know you are fighting with your spouse b/c you feel too guilty to go on that anniversary cruise you've been planning for 2 years.

                                boundaries, they are important.

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