WWYD- re mortgage and help from ILs

[vendigirl]

I wanted to toss this out there for some input. This is an issue I have been struggling with for a long time.
My ILs are extremely generous people. They basically support my Dh's siblings and they have been very generous with us- givong us money toward our downpayment on our house, giving us a no interest loan to buy a car and my FIL wants my DH to keep his gas guzzling- SUV so badly that he has paid for many repairs on it even though we only use it for extremely bad weather. For example, we left it parked in front of ILs house this week so that we could share a ride home from the city (save gas) and when Dh went to get it yesterday it has 4 new tires and a new windshield.
My FIL really wants to see us pay off our mortgatge ASAP, so last year we accepted $18 K to make a balloon payment toward it. He wants to do this every year until it is paid off (2007) and then says we can pay him back at no interest. Sounds fabulous, right?
The problem lies in that I am extremely independent by nature. I would love to be mortgage free (who wouldn't), but I have a very difficult time "borrowing" this money that will equal about $56K in the end. I seriously don't think the ILs will live long enough for us to pay them back at a reasonable rate. Perhaps if we were to bump our mortgage payments up to $1000 a month we could pay them back, but that would leave us pretty poor being a one income family. Plus, we currently pay them $275/ month for our car loan, but most months they don't deposit the cheque. In 2 years they've only deposited 11 cheques. so, the other side of this is that as great as it would be to be mortgage free, I don't know if I would be able to enjoy it knowing that we still owe the ILs. Dh has no problem accepting this offer and is baffled by my hesitation. What would you do?? I really am torn.

[jhd815]

Re: WWYD- re mortgage and help from ILs

Is it safe to assume that Dh stands for Dear husband? Devoted husband? Dumb husband? (just kidding on the last one)

Anyway, why do the IL's want you to pay off your mortgage? WITH your mortgage you are able to deduct interest on your home loan; WITHOUT the mortgage you will lose that deduction.

What about taking their offer of help and getting rid of the gas guzzling SUV and buying something more economical? This would save you and your IL's money in the long run.

I understand how you feel about being independent, especially when it comes to money and family. Even though their offer is given generously it is hard to not feel like you are indebted to them for a long, long time.

When you mentioned your dilemma, the loss of the interest deduction was the first thing that came to mind. I'm sure others will have other suggestions and opinions.

Good luck with your decision!

[vendigirl]

Re: WWYD- re mortgage and help from ILs

Yes, Dh refers to my husband- what the "D" stands for is dependant on the day. *g*
I forgot to mention that I am not in the U.S., so the interest is not a tax deduction for us. Unfortunately we can only deduct a percentage of mortgage interest if we have a home based business,which we don't right now. Even if we did, it would only be a percentage so not having mortgage interest would always be beneficial.
My FIL in particular doesn't want to see us paying thousands of dollars in interest- which is why he is offering this no interest loan to pay the mortgage. I guess that was important information that I neglected to provide.

[jhd815]

Re: WWYD- re mortgage and help from ILs

Vendigirl,

Sorry about that ... my ignorance is showing. I always think everyone out here is from the same place I am. I must remember the web is global!

[vendigirl]

Re: WWYD- re mortgage and help from ILs

Gosh, no! It was my oversight to start with. I forgot that you lucky people get to deduct mortgage interest.
Thanks for your input anyway.

[moneyrant]

Re: WWYD- re mortgage and help from ILs

Anyway, why do the IL's want you to pay off your mortgage? WITH your mortgage you are able to deduct interest on your home loan; WITHOUT the mortgage you will lose that deduction.

ummm, mortgage deduction is small % of what has to be paid. Better than credit card debt? yes. Better than not having an mortgage? no.

[terry1156]

Re: WWYD- re mortgage and help from ILs

I can see your dilemma. I guess the way that I would look at it is that if they didn't give you the money, what would happen to it? If it is extra money that would come to your as a lump sum as an inheritance, then I would think that they are doing this not only to help you out, but also so they can give something and see the happiness it brings. I would accept it gratefully and take some of the money you save to spend special time with them...I think that would be the greatest gift and much more valuable to them than the actual repayment (although I think you should continue to make the repayments)

Now if this is going to cause them financial hardships in the future, then that is another subject completely.

Obviously they are doing quite well to be able to offer you these gifts. I would ask their advice on saving money and how they accumulated their wealth. Not only will you gain knowledge you can use, I'm sure they would be very happy to have you and DH asking for advice.

Most of all, I would no squander this opportunity if you decide to accept it. This will give the two of you a great chance to build a nice retirement nest egg so that you can do what you want in your later years...if you have certain items paid for by them, take the money that you would have had to pay and invest it. This will guarantee that their generosity is appreciated in your later years.

Just my thoughts -----

[2moretrees]

Re: WWYD- re mortgage and help from ILs

I wish I had that dilemma But seriously, I understand that it is a difficult situation that can tear at what you think is best.

I don't think there is a right or wrong answer. As you said, your independent side will have to come to terms with which is best. I don't see anything wrong with taking the gift in itelsf, but you know if there are any hidden strings attached that can't be calculated in numbers.