DAVE RAMSEY

Dave says: Should you accept your in-law’s offer to pay off your mortgage?

Mar 26, 2024, 2:00 PM

This week's article discusses what could happen if you accept a loan from a family member. (Pexels ...

This week's article discusses what could happen if you accept a loan from a family member. (Pexels Photo)

(Pexels Photo)

Dear Dave,

My wife and I owe about $40,000 on our mortgage. My father-in-law, who is a very nice and generous man, said he wants to pay off the house for us, then let us pay him back over time. We’ve borrowed much smaller amounts of money from him in the past, and we were always able to repay it with no issues and no pressure. How do you feel about us taking him up on his offer?

Seth


Dear Seth,

I understand you and your wife have been fortunate in these kinds of situations over the years. And I know your father-in-law would probably be a lot easier to work with than a mortgage company when it comes to the size and frequency of payments. But I still think you’re playing with fire if you take him up on the offer.

I assume your father-in-law is doing pretty well financially, since he can afford to make this offer. But the downside is just too risky. If I were him, I might offer to pay off the mortgage as a gift to my daughter and son-in-law. But a loan? No way. There are no strings attached to a gift that comes from the heart.

Don’t get me wrong, Seth. I’m not bad-mouthing your father-in-law. What he’s making is a very generous offer, and it’s an incredibly nice thing to do. But in my mind, a very important consideration is being left out of the equation, and it’s a spiritual issue. The borrower is always slave to the lender. Always. And sadly enough, nowhere is that more true than within a family.

Accepting this offer could bring instant discomfort into the relationship for you and your wife. This money situation is likely to hang over things like a dark cloud. Thanksgiving, Christmas and other special occasions will feel different—and kind of weird—when you’re suddenly celebrating with your mortgage lender instead of just good, old dad.

Even if you come from a reasonable, stable family, and it sounds to me like your in-laws are very good-hearted folks, this debt will always be in the back of your mind. But if you’re involved with a dysfunctional or controlling family, that tension is going to be right there—constantly.

I’d thank your father-in-law for his generosity and for the offer. But in my mind, it’s just not worth the risk.

— Dave

ENDORSEMENTS

Dave Ramsey

Living with roommates can quickly become difficult if one person doesn't live up to their financial...

Dave Ramsey

Dave says: It isn’t easy addressing late payments with your roommate

Living with roommates can quickly become difficult if one person doesn't live up to their financial promises. Here are best tips from Dave Ramsey.

3 days ago

A small business owner wants his company to have more passionate leaders. (File photo: Tim Douglas/...

Dave Ramsey

Dave Ramsey says: Should a small business owner plug in or promote from within?

A man who owns a small business with around 20 employees tells Dave Ramsey he wants to promote two people to the next level.

6 days ago

what to do when rent increases and parents offer to let you live with them...

Dave Ramsey

Dave Ramsey says: Parents of adults should provide a safety net, not a hammock

Should a woman and her husband who are $80,000 in debt move in with her parents? Here's what Dave Ramsay says.

10 days ago

Learn how to wisely invest and enjoy the inheritance while securing a financially stable future. (P...

Dave Ramsey

Dave says: As the older sibling, you can teach your younger sibling a lot

In this heartfelt letter, Dave Ramsey offers indispensable advice to Davis on guiding his teenage sister through a substantial inheritance.

17 days ago

In this week's article, Dave talks about how to tackle a difficult family situation while not getti...

Dave Ramsey

Dave says: How to navigate tough times with love and understanding

In this week's article, Dave talks about how to tackle a difficult family situation while not getting on anyone's bad side.

1 month ago

(Pexels Photo)...

Dave Ramsey

Dave says: Why cashing out your 401(k) to start a business might not be the best idea

Emphasizing the dangers of risking their retirement savings and potential bankruptcy, Dave Ramsey encourages thoughtful planning and starting small.

1 month ago

Sponsored Articles

...

DISC Desert Institute for Spine Care

Sciatica pain is treatable but surgery may be required

Sciatica pain is one of the most common ailments a person can face, and if not taken seriously, it could become one of the most harmful.

...

Day & Night Air Conditioning, Heating and Plumbing

Day & Night is looking for the oldest AC in the Valley

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

...

Fiesta Bowl Foundation

The 51st annual Vrbo Fiesta Bowl Parade is excitingly upon us

The 51st annual Vrbo Fiesta Bowl Parade presented by Lerner & Rowe is upon us! The attraction honors Arizona and the history of the game.

Dave says: Should you accept your in-law’s offer to pay off your mortgage?