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Help needed (moral issue?). Dad giving me loan-how much should I give him back?
therealslimcj
Posts: 144 Forumite
Hi
Ok thinking caps on.
My dad has come into a bit of money and has no idea what to do with it, so I have been advising him (just the usual-ISA, savings, regular savings etc) as he has no idea what to do with this lump sum (he was made redundant but has now got a new job so wants the money put away for his retirement).
He has agreed to give me £25k. This is a loan and it will be used thus:
£17k into my mortgage. This will obv save me money on payments and interest over time.
£5k to pay off a loan. This will save £2k in interest over 7 years of the loan.
£1300 to other debt.
£5k to refurbish my house.
The whole point of the loan is that me and my GF can plough it into our mortgage, then next year move house and use the equity gained to get a better place than we otherwise could have afforded.
In essence, my dad is investing in me to help me and my gf get better house and improve our own.
The question is this: how should I repay him?
Should I give him 5% interest on the 25k?
Should I match the savings account rate (although this wouldn't help us as much in the end)?
I just don't know. It IS family and he wants to help but at the same time I want him to get a decent deal for himself. Help!
Ok thinking caps on.
My dad has come into a bit of money and has no idea what to do with it, so I have been advising him (just the usual-ISA, savings, regular savings etc) as he has no idea what to do with this lump sum (he was made redundant but has now got a new job so wants the money put away for his retirement).
He has agreed to give me £25k. This is a loan and it will be used thus:
£17k into my mortgage. This will obv save me money on payments and interest over time.
£5k to pay off a loan. This will save £2k in interest over 7 years of the loan.
£1300 to other debt.
£5k to refurbish my house.
The whole point of the loan is that me and my GF can plough it into our mortgage, then next year move house and use the equity gained to get a better place than we otherwise could have afforded.
In essence, my dad is investing in me to help me and my gf get better house and improve our own.
The question is this: how should I repay him?
Should I give him 5% interest on the 25k?
Should I match the savings account rate (although this wouldn't help us as much in the end)?
I just don't know. It IS family and he wants to help but at the same time I want him to get a decent deal for himself. Help!
Back on the MSE wagon after going dark for a while.
0
Comments
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Sounds like you've got a really decent dad, there. I doubt that he will be looking to earn anything out of this 'loan', but why not calculate what it will save you, and give him half.I am NOT, nor do I profess to be, a Qualified Debt Adviser. I have made MANY mistakes and have OFTEN been the unwitting victim of the the shamefull tactics of the Financial Industry.
If any of my experiences, or the knowledge that I have gained from those experiences, can help anyone who finds themselves in similar circumstances, then my experiences have not been in vain.
HMRC Bankruptcy Statistic - 26th October 2006 - 23rd April 2007 BCSC Member No. 7
DFW Nerd # 166 PROUD TO BE DEALING WITH MY DEBTS0 -
You said your dad is lending you £25000 but the things you are paying off come to £28300.Am I missing something or do your sums not add up?0
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What a fab dad - would he like to adopt me do you reckon?
I'm kind of clueless about investments honey, but could the money for refurbishment sit in a savings account until you need it, and you take out money as and when you need to and you pay a monthly amount into the same account to pay your dad back.
Does that kind of make sense?
Because of all the monthly debt repayment that will have disappeared plus a smaller mortgage you might be able to cover a lot of the refurb bills yourselves and so the refurb fund could sit undisturbed for a while earning interest - but it's there if you really need it.
As this starts to mount up you could invest it in ISAs (or something!) to to get the best return for your dad.
Give your dad a hug from me. :T
Love Jacks xxx
Not everything that can be counted counts, and not everything that counts can be counted. Einstein0
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