Paying Dad Back

Dear Dave,

My father-in-law wants to help us with our mortgage. We currently owe $50,000, and he wants to pay it off and let us pay him back over time. We've borrowed money from him in the past and paid it back with no problem.

Bob

Dear Bob,

I wouldn't do that in a million years. Don't get me wrong, that's a very nice thing to do for someone. I'm sure it seems like a winning proposition for you both. But a spiritual issue has been left out of the equation. The borrower is always slave to the lender, and nowhere is that more true than in a family. You'd bring instant discomfort into your relationship. The money issue will hover over you like a shroud. Trust me, Thanksgiving dinner will taste kind of funny when you're sitting there with your lender instead of good old dad.

I understand that you have a solid track record with this kind of thing, but you're playing with fire. I simply would not do this! The downside is just too risky. I assume your father-in-law is doing pretty well, since he can afford to make this offer. If I were in his shoes, I might offer to pay off the mortgage as a gift to my daughter and son-in-law. There are no strings attached to a gift that comes from the heart.

If you come from a nice, stable family - and it sounds to me like your in-laws are very nice folks - this debt will always be there in the back of your mind. If you come from a dysfunctional, screwed-up, control-freak kind of family, it's going to be right there in front of you constantly! Either way, it's not worth the risk.

- Dave

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