<p>“I am more worried about the effects if we do not help and things go sour for my BIL. DH will feel terrible and he might blame me.” OTOH, Worriedmom, your husband might be relieved if you stood your ground and said “no” about this. They are not close. Your husband is not responsible for his brother, how he has evolved as an adult, and what the consequences are, nor can he change him and alter his future behavior, which is likely to be just as irresponsible. However, you both are responsible for the future security of your nuclear family. You have every reason to balk at this…and it seems that most who are commenting here think you can and should. Good luck with the process and the decision.</p>
<p>In a word, “no”. I read through this thread, and H and I would have a unified front on this one. Frankly, I think that it takes the height of nerve to even ask!!</p>
<p>I am curious what your husband think he should do, besides feeling guilty ? </p>
<p>Does he think you guys should be ok and financially secure if he does not get his contract extended ? </p>
<p>I have heard of loans where you can borrow against “future financial settlement” or some such thing. Can your BIL try these since he is expecting an inheritance ?</p>
<p>Fifteen years ago, we lent a small sum of money to a relative who actually paid it back. I remember the whole experience as very stressful. It was embarrassing just thinking about the possibility that he wouldn’t make the payments. I would NEVER do it again. Don’t do it.</p>
<p>I lent money to my brother many years ago. He was going to be getting his bar mitzvah money (after he graduated college, my parents are very controlling) and he needed cash now (it was only for a few months). I had no qualms about it. He repaid me no problem. It’s not a blanket statement to never help someone. But in this case, I’d definitely not do it. </p>
<p>You didn’t ask, but if this person asks you to cosign a loan, the answer to that would be no also.</p>
<p>sueinphilly, I agree, and each situation is different (financial health of all parties, dollar amount, and reasons behind borrowing/getting into a position that one needs to borrow from relatives), and not everyone feels the same way.</p>
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<p>If you loan the money, you will lose $40K and the relationship (he won’t pay you back). If you don’t loan the money, you’ll lose the relationship. Either way I see it, you’ll lose the relationship. Why not save yourself $40K (that is better used to support your own children and your own retirement)?</p>
<p>He really needs to sell the house or other assets. So what if he won’t get as good a price on the house as he would have if he could hold out until the market gets better. He needs the $$ now. It is time for him to take care of his own problems. Sure, it would be inconvenient for him to move, but you have to do what you have to do (unless you can get some guilt-ridden relative to pony up the money for you).</p>
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<p>I don’t think you’re being ridiculous to worry that your HELOC might be frozen. It’s happening now and it started happening earlier this year. I’ve posted this link before; it’s not commonly known that HELOCs are being pulled out from under people. Maybe a small transfer of $500 to test the availability of this money at your bank would be prudent.</p>
<p>[Homeowners</a> Losing Equity Lines - washingtonpost.com](<a href=“http://www.washingtonpost.com/wp-dyn/content/article/2008/02/22/AR2008022202987.html?hpid=topnews]Homeowners”>http://www.washingtonpost.com/wp-dyn/content/article/2008/02/22/AR2008022202987.html?hpid=topnews)</p>
<p>My tax guy called me the other day and advised me to open a new HELOC and close my old one because the old one was with Washington Mutual and he had had two clients unable to access their lines of credit…</p>
<p>It is happening…</p>
<p>This entire thread is making ME nervous, and I’m not even the OP! On a scale of 1 (do it) to 10 (don’t do it), this one shouts 11!</p>
<p>There is not one benefit to you, or your family if you do it. </p>
<p>The BIL will not pay you first, ever, especially since he has a HS aged child (that means college expenses).</p>
<p>You will resent your H & his B if you cave in. </p>
<p>I said it before and I’ll say it again, you don’t solve money problems with money.</p>
<p>If your boyfriend cannot qualify for a cell phone, don’t get him one, you’ll end up on Judge Judy.</p>
<p>If a person cannot qualify for a bank loan, they (the pros who make money (theoretically;)) loaning money) know something you don’t know causing that. Don’t ever loan money unless you can afford to lose it.</p>
<p>Do not borrow on your credit card (HELOC) to pay some one else’s bill, that is not your money, so you cannot afford to lose it.</p>
<p>I loaned my brother $5k 20 years ago for a down payment on a home, he paid it back no problem. I would not loan this BIL. I also highly recommend NEVER cosigning, you lose all control of the loan and by the time you learn the person is behind your credit is ruined.</p>
<p>I have a disabled sibling who went in “50-50” on a home with my other sibling. Why did the healthy one want to pay for the home of the disabled one? Because the disabled one inherited a chunk of money, but not enough to buy a house and she would then spend it all and be homeless!</p>
<p>Now, 10 years later, healthy sibling pays 3/4 of the monthly payment, disabled sis pays 1/4, lives there (so the healthy sib technically has to accrue an imputed rent!) and considers herself half owner. Healthy sib is wondering why the heck this seemed like a good idea- it has caused much misery and every bit of compromise comes from the person with money not the borrower :(</p>
<p>OP- remember, the BIL has no business knowing your life’s details (existence of a HELOC) If you tell him all your investments are in the market and/or retirement funds and you don’t want to sell now, nor do you want to take a penalty, he should not be able to question that- though he probably will ;)</p>
<p>Remember your life choices are not his business and you don’t have to justify your decision, “I cannot afford it” is sufficient.</p>
<p>If he owes $20k or might lose his job then he must have known for quite a while, but ignored it. I had an employee who owed me nearly $5k for advertising yet when I provided a statement he claimed he had had no idea- I guess he could not follow the simple math! His repayment has been very slow, but I I getting some money. If his employer or some one like that is owed, they would probably renegotiate the terms if he showed good faith.</p>
<p>Why should you borrow against your home? Let him sell his home and relocate and he and his wife pick up Wal-Mart greeter jobs to make regular repayments.</p>
<p>Tell him to forget the rental refurbishments, yes, it would be selling in a down market, but when he buys something else he would be buying in a down market!</p>
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<p>Keep saying this. Somemom is right. No matter what BIL might say to try to convince you that you NEED to give him the $$, just keep with the mantra.</p>
<p>The real issue, it seems to me, is the relationship between OP and H.</p>
<p>I think the OP is quite clear that it is a bad idea to make the loan. But she is worried about how an exercise of her “veto” will impact her relationship with her own H, at least in the short term. </p>
<p>Everything posted by the OP here shouts that this loan will never be repaid. The only reasons BIL “needs” it is (1) that he does not want to sell the house in which he has huge equity. He doesn’t want to discomfort his lifestyle and give up paper gains that have disappeared with the market downturn. He will still have huge gains, on a house that he had help buying in the first place; (2) that his credit is bad enough that he cannot borrow a pittance against huge equity.</p>
<p>So it comes down to the OP and her H seeing this from the same vantage point. I get how difficult that may be and how much the OP doesn’t want to put even a small wedge between her and H. The problem is that, if the loan is not repaid, the wedge will crop up sooner or later. If the loan is not made, the wedge will arise sooner.</p>
<p>Maybe the right thing to do is for the OP and H to sit for a one time counseling session to help them talk through this together.</p>
<p>I feel for you, worriedmom. I hope I and others are wrong that this money will go up in smoke if you lend it. But I am pretty sure we are right.</p>
<p>jmmom, tremendous wisdom here.</p>
<p>OP, 20 years ago I was the “bad cop” and said “no” to my BIL on this issue. On a rational level, DH and I have never regretted it, as we’ve watched him spiral down, even with help from other family members. Still, my DH loves his brother, and wants to help. Every few years my DH will say, “maybe if we just gave him a car…” </p>
<p>There is no amount of money that will save this person from themselves. Our BILs needs to grow up, which may never happen, since it hasn’t yet. I agree that you and your DH could benefit greatly from understanding your BIL (through counseling?), and not just his behavior about money, which could be a symptom of refusing to take responsibility for a lot of things in his life. </p>
<p>Yes, my DH feels guilty about not helping, but he also understands (usually) that this “help” would just allow BIL to continue in the same pattern of underemployment and living beyond his means.</p>
<p>I admire your desire to help, and your big heart, but it’s OK to say no.</p>
<p>First of all, I agree - DO NOT MAKE THIS LOAN !! You do not have $ 40,000 - or even $ 20,000.</p>
<p>I am reading a lot of speculation about the worth of BIL house. Even the high end markets are dropping rapidly - even if the house is worth $ 1 mil now, it’s probably still dropping. Securing the personal loan with his house may not be any help, as he can still continue to draw on the equity without your knowledge, or if he is not underwater now - he may be soon. Honestly, if he can get $ 1 mil for his house - he should do it now.</p>
<p>If you go forward with the loan, pay the money to have an appraisal (or even two) from a fully qualified independent appraiser (not an apprentice). Also, get at least 3 market analyses from RE Agents, full time with lots of experience. My guess is, he is greatly exaggerating the worth of his house.</p>
<p>But you really don’t have the money - why are you even considering jeopardizing all of your hard work & your futures for this guy ? If him & his wife aren’t working at least 2 jobs each, then they obviously aren’t working hard enough - and that fact makes it’s own statement.</p>
<p>You MUST assume this money WILL NOT be paid back, otherwise you are putting strings on a relationship that by its nature should be unconditional, that of a sibling. this doe not mean you give him the money, but expecting it back is not the best idea.</p>
<p>Banks loan money for a reason- to make a profit when the loan is repaid with interest. They don’t loan money for a reason- when the potential borrower is too risky. Do you have more money to loan than a bank? If so, write up the loan and go for it. If not, then tell him you aren’t in a position to loan that kind of money now and urge him to go to a professional lender that does.
If all the home equity he claims is true, he should have no trouble. If you loan him money and he is often late paying or actually defaults, there will be family trouble for generations.</p>
<p>No, no, no, no…</p>
<p>Relationship forever strained by good-hearted loans to a family member (who also, coincidentally, had always lived just beyond his means, and the situation was always not his fault…ha!) we really couldn’t afford that never got paid back. Permanent elephant in the room. Don’t do it.</p>