Would you refiance someone else's home loan if they could potentially lose their home?
Sunday, 22. August 2010
My MIL asked my husband to refinance her home loan with her so that she can get a lower interest rate. She owes a home with my husband’s brother. She refinanced her home a few times and now she has an interest only loan, so she’s not building equity.
We own a house too, have a child in private school and I resigned from my job to start my own business. Interestly enough, she spoke to my husband about the refinancing the day before I resigned from my job and I am pretty sure I told her when I was going to resign. Why gives her the right to come to my husband and ask him for such a huge favor? My MIL and BIL are unable to handle the responsibily and need to sell the house ASAP
CUrias Says:
This is going to cause problems no matter what but I would not do this. Clearly they have problems and can’t keep it together. You mention in your question that they could potentially lose their home. Do you want to lose your home too by bringing some other person’s responsibility into your home and making it your problem?
I understand that your husband would want to help, she is his mother. However what has to be clear to him is that his family has to come first. You’re married – if your in-laws screw up, you are liable for them. Not just your husband, you as well.
Don’t risk your child’s security for anybody.
James R Says:
you are absolutely right, you do know that if your bil and mil default on the loan, then you all’s property will be used as collateral to secure the principle !? in other words, if your husband does that, then he will be putting the fate of you alls homestead in the hands of imbaciles. Someone wise once said, "never loan more than you can afford to lose with no return," I doubt anyone is so well off that they can give their home away. Not unless they would rather live in a shopping cart.
Aviatr1 Says:
Ultimately, only you & your husband can come up with the right aswer for you. That being said, I believe your primary responsibility is to your own family…you, your husband, your child. Putting your family in the position of taking on another mortgage for two adults that make bad financial decisions could be financial suicide for you. Maybe another way of helping without hurting you as much would be to help them with a few payments for a determined amount of time and getting them financial counseling with a professional that could help them refinance to a program that makes more sense than interest only while also educating them on how to make better financial choices in future so you guys are off the hook. This way your husband can help his mother & brother while not having you shoulder a burden for an undetermined amount of time. Good luck.
HPH Says:
Being his mother gives her the right to ask. Having a family gives your husband the responsibility to say no unless you can comfortably afford to consider making her mortgage payment a gift.