127
votes
Best way to get my money back from a friend having family problems
As a general rule of thumb, when lending anything to a friend or colleague, never lend more than you would be willing to give as a gift. If it gets repaid, that's great. If it doesn't, chalk it up to ...
- 1,576
113
votes
Accepted
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
It's a little unusual, but I don't think the financial terms are completely unreasonable on their face.
What you describe is similar to an interest-only loan, where you make payments that only cover ...
- 7,011
53
votes
Accepted
Best way to get my money back from a friend having family problems
I assume the goal here is for both he and you to feel some progress is being made toward repaying the loan, even if in practice very little is done towards achieving the final goal of total repayment. ...
- 4,476
44
votes
Does borrowing from my 401(k) make sense in my specific circumstance?
The set of circumstances that 401k loans make sense, are very small. As you would expect yours is not one of them.
You make 70K per year and need 6500. Interest rate is not your problem, budgeting ...
- 79.6k
37
votes
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
"Ripped off" may be too strong as it implies intent - I'm hopeful it's just bad logic or terminology.
I would say better agreements would be:
You own the condo 100% and borrow the remaining 75% ...
- 142k
28
votes
Accepted
Does borrowing from my 401(k) make sense in my specific circumstance?
Your comment regarding your existing finances is very relevant and helpful. You need to understand that generally in personal finance circles, when a strong earning 22 year-old is looking for a loan ...
- 49.1k
27
votes
Does borrowing from my 401(k) make sense in my specific circumstance?
I completely agree with Pete that a 401(k) loan is not the answer, but I have an alternate proposal:
Reduce your 401(k) contribution down to the 4% that you get a match on. If you are cash poor now ...
- 142k
25
votes
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
To expand on what @fishinear and some others are saying:
The only way to look at it is that the parents have invested, because the parents get a % of the property in the end, rather than the ...
- 359
20
votes
Can you borrow foreign currency from local banks?
It depends on the country-- there is no general answer. In some countries, it is common for loans to be available in the local currency or in some other currency. In others it is not. In Canada ...
- 28.3k
16
votes
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
First, this was never an arrangement for you to build equity, this was an arrangement for them to speculate on another house under the guise of teaching you a life lesson like responsibility or ...
- 20.2k
13
votes
Why don’t broker-dealers borrow against their clients’ stock holdings instead of lending them?
Pause on the issue with 'having security for a loan' for a moment [it seems to be clouding the economic reality of what you are presenting]. Your plan is for a bank to lend your hypothetical broker ...
- 43k
11
votes
Borrowing money and then investing it -- smart or nart?
The biggest concern is how you get $250,000 in unsecured credit. It's unlikely that you will be loaned that amount at a percentage lower than what you expect to earn. Unsecured credit lines are rarely ...
9
votes
Does borrowing from my 401(k) make sense in my specific circumstance?
I see you've marked an answer as accepted but I MUST tell you that STOPPING your 401k contribution all together is a bad idea.
Your company match is 100% rate of return(or 50% depending on structure)....
- 175
9
votes
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
You are getting totally hosed mate.
Assume you live in the house for ten years, can get a normal 30 year mortgage and house prices average at 3% annually
You could get a mortgage at 3.8% so your ...
- 99
9
votes
Do rich people never have to pay back what they borrow with their wealth as security? Does the same apply in my case?
Obviously, no one here is going to know exactly how some rich person or another manages their finances.
In general, however, if someone owns a property, they can take out a loan against that property. ...
- 28.3k
9
votes
Can you borrow foreign currency from local banks?
Bulgaria here:
Banks widely offer loans in BGN (the local currency), as well as in EUR and USD.
The interest rates for EUR and USD are somewhat lower than those for BGN. The difference used to be ...
- 1,169
8
votes
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
If I understand you situation correctly, then the accepted answer is extremely misleading and incorrect. Your arrangement with your parents is definitely unreasonable.
It is definitely not "similar ...
- 197
8
votes
Best way to get my money back from a friend having family problems
So, I am in the situation of having a friend who can’t return the money now, he and his girlfriend ask me for patience, and I don’t see any plan from them to return the money.
I would just let it go ...
- 2,549
8
votes
Why don’t broker-dealers borrow against their clients’ stock holdings instead of lending them?
They don't own the stock
The first big thing is that they are prohibited to do so, they are required by SEC custody rules to keep the stock under a qualified custodian unencumbered. E.g. 17 CFR § 240....
- 3,362
7
votes
How can I borrow in order to improve a home I just bought?
Be careful that pride is not getting in the way of making a good decision. As it stands now what difference does it make to have 200K worth of debt and a 200K house or 225K of debt and a 250K house? ...
- 79.6k
7
votes
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
Yes, you are getting shafted. In the end, you will have paid the full price of the condo, but still own only 25% of it. Your parents' stake in the home should decrease as you repay the loan. The way ...
- 5,208
7
votes
Borrowing money and then investing it -- smart or nart?
I will use 10% of this 20K to pay the loan back on an annual basis agreement
An annual payment of 0.8% ($2,000 / $250,000) is nowhere near large enough. The interest alone is going to be well over $...
- 142k
7
votes
Why don’t broker-dealers borrow against their clients’ stock holdings instead of lending them?
I think you are asking about earning a small spread between an overnight borrowing rate and a longer (but still short-term) Treasury bill rate. That small spread, if it exists, is only a fair ...
- 30.3k
6
votes
Accepted
Why would anyone borrow using a DEFI (Decentralised Finance) platform?
You would only do this if you don't mind locking up the collateral. For example, say you have $100 worth of ETH and you plan to hold it long term anyway. Having to lock it up has near zero cost to you....
- 10.4k
5
votes
How can such a thing as a "fully collateralized" Bitcoin loan exist?
What you describe is what a loan is. The collateralization scheme seems off, though.
You can't, generally, just get things for free. If you want to buy a house, which is for sale at the price of one ...
- 1,578
5
votes
Accepted
Borrow and return HSA funds in same tax year - taxes and/or penalty?
No, HSA disbursements and contributions are not "netted" like that. Contributions and disbursements are accounted for separately and must be independently qualified. Any non-qualified ...
- 142k
5
votes
Borrow from 401k (and pay interest to myself) or take a loan from bank (and pay interest to the bank) to buy a car?
Check to see if you will still be able to contribute to the 401(k), and if you will still get the match while you have the loan. If you can't contribute new funds and can't get the match, then the ...
- 145k
4
votes
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
No It's not a loan. It's an equity investment.
Think of it as a business. The parents bought 75% of the equity with $115K, and are entitled to 75% of the sale proceeds, should you someday liquidate ...
- 2,197
4
votes
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
First, I don't think your parents are ripping you off, but you should get your agreement in writing. The fact that you never own more than 25% doesn't matter. If the condo's value is increasing, you ...
- 41
4
votes
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
Talk to your parents, and find out if you are reducing the debt or not. Find buyers, sell the place now and get out the deal. Of course you will have to wait to get a good price on it. Short term ...
- 357
Only top scored, non community-wiki answers of a minimum length are eligible