In Laws Asking for Money

Hi All - As title suggests, my sister in law has asked us to help with fronting some cash for a real estate purchase. While there are many posts online and on WSO on the topic of whether to lend money to family, it’s good to get a refresh once in a while from the community on how best to approach, especially in the current uncertain environment. 

some further colour on the SIL’s situation:

- They have asked us for up to $25k for downpayment. Besides us, the father in law will put up the remaining downpayment (believe another $45k or so)
- My sister in law has a decent paying job by non-finance/tech/law/medicine standards in a LCOL city, but spends as much as she makes. My impression is that she will make her mortgage payments if the purchase goes through since it’s a “bill”. The last time my wife lent her money for a laptop, the money was not returned for 2 years and after some pestering.

  • My partner admitted that they have asked for open terms on the personal loan from us - I.e. no interest, no set tenor or repayment terms. Believe the father in law is offering his entire portion as a gift.

A bit on my spouse and I:

  • We make decent money in a HCOL city but not really to a degree where $20k is trivial. My wife is currently not working and on Mat leave. We have 2 young kids kids together. In the current environment, the sense I get is that no one is safe in their role (or certainly doesn’t feel safe), so job security risk is heightened in my view for the next 12 months or so.

  • We bought our principal residence recently and  have a sizeable mortgage on the property. I have an emergency fund saved up and some additional amounts for mortgage balloon payments, which becomes an option later this year.

While I would love to help a family get started in life, I can’t help but shake the feeling that if we lend the money, we won’t see a penny of it back. I’m also afraid that this sets a precedence as my wife has a few other siblings, and none of them own a property. On the other hand, the rest of her family view us as wealthy, so saying no might make rub them the wrong way.

What does the community think? 

tldr: should I lend money to sister in law for  property purchase?

Edit: wow, thanks for all the feedback! Consensus seems to be no, and it is what I’m leaning towards. To be honest, I’ve been procrastinating on this topic and chose not to respond to their initial ask - I want to see if they would catch on their ask is overboard and make a more reasonable request. Nothing so far…one clarification is that SIL is currently in a LD relationship (believe her partner does some IG social media type work, but not big league). Also, the ask came from my father in law instead of SIL, which I found to be strange. He is generally a nice guy and miser.

Edit 2: Thanks again to all the feedback. My wife had a chat with the FIL - looks like the real scenario is FIL wanted to help SIL with property purchase but was short some cash for downpayment. In his mind, it’s better to borrow from us than the bank since we (unlike the bank) does not charge interest - terribly flawed reasoning since any money we set aside means more mortgage interest for us (even assuming he considers his offsprings’ money as a giant pot). Beyond that, the wife was more than happy to say no. I was glad we were on the same page about where family obligations end - and helping a sibling with a discretionary purchase of this size is clearly out of bounds. 

I don't think you should give them the money. If you do decide to give them the money, make a pact with yourself that you probably won't get it back.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee
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This sounds like a fucking disaster waiting to happen, maybeeeee if this was your actual sister who you have a deep lifelong bond with, but this isn't. Shooting this down as quick as possible if im in your shoes. She's already setting her own terms with no interest, no payments set? tf? Also you say "They" is she married? Where's the guy in this?Sounds like a total leach scenario here, see your last issue with her for a $1,000 laptop, much less a $25k gift. You got a wife not working rn and 2 kids to set up a life for, tell her to kick rocks and learn how to save like a fucking adult.


Yeah and it doesn't help that based on OPs edits the FIL considers his portion as a "gift" and the ask for the incremental $25k is coming from HIM, not the SIL. Frankly, if OP goes through with this, you can't blame the SIL for not paying back if the FIL asked you to do some back-door deal with him for the additional $25k. You'd be needlessly adding a middleman and frankly imposing your generosity onto your SIL (again, assuming your FIL asked on her behalf and not her directly).

Not to be too harsh but I'd add that the LD husband needs to get a better job. They're just not ready to buy property and being one of many siblings asking your parents for money is downright pathetic in my book.

Have you thought of getting a sort of lien on the home? What type of realizable value can you get if they default? You probably can’t get ahead of the bank tranche but maybe there’s some collateral they can put down.

Best scenario is to tell them tough luck, seems like a lot to deal with especially with their bad credit history .

> spends as much as she makes

> my wife lent her money for a laptop, the money was not returned for 2 years 

> they have asked for open terms on the personal loan from us - I.e. no interest, no set tenor or repayment terms

You're never getting that money back. If they're unwilling to put a timeline on it that would suggest they know they're taking you for a ride but just expect you to go with it


> spends as much as she makes

> my wife lent her money for a laptop, the money was not returned for 2 years 

> they have asked for open terms on the personal loan from us - I.e. no interest, no set tenor or repayment terms

You're never getting that money back. If they're unwilling to put a timeline on it that would suggest they know they're taking you for a ride but just expect you to go with it

Really this is the crux of the issue. Even they know they're not reliable enough to put a timeline on it. 

Agree with the above.

Given the history with the rather small sum of money required to purchase a laptop, definitely would not be parting with $25k in an open term “loan.”

I think the typical adage applies here: if you’re going to lend it, do so expecting that you will never see it repaid.

Dude if you are lending to her at 0%, you are effectively losing 7% per year. I went into business with a good friend of mine, and there is a reason why they say don't mix friends and business together. Situations will come up that will inherently test your friendship. And you are talking family, so it could only be much worse. Do not engage. 

hardship withdrawal from 401k for 1st time homebuyers, that should be where they go first

if she doesn't have any money in her 401k, I'd encourage her to get her life together before buying a house

I'd also point out the laptop thing and say that you'd be uncomfortable with that risk and in today's interest rate environment, those loan terms are unfair

Think it depends on some things, for example I have a younger sister who's married with an infant, husband in military - so live a very frugal life near the military base, save as much as they can, and likely will never be "high-earners" like most on this forum but just want to live a good middle-class family life. I would love to help them out later down the road if the occasion called for it. Knowing they would be incredibly grateful and we have been close my entire life and the gift would be well worth it to me. It's well known amongst my siblings I am the high earner of the family (parents included), but not once have I ever been asked to give anything like OP whose in-laws just see him as the "rich guy" and feels entitled to his hard work for some reason. (other than my dumbass 19 yr old brother who needed $40 bucks in gas money to get back to college last semester lol)  


No is a complete sentence.

This is not a reasonable ask, especially if they have been lent money before and it was a hassle to get it back (2 years for $1-2k? Ridiculous). 0% interest and no repayment terms essentially means they want you to gift it to her.

Be polite and say you're not in a position to do that. End of sentence.


Spouse funded $120k grad school tuition for their 2 siblings. This happened before we met so whatever. They’re both medical professionals now and spouse is yet to see a cent of payment (and isn’t pushing for it either). Now that we're married with joint finance I'd shoot that down. If spouse doesn't agree I wouldn't know what to do, might rise to irreconcilable differences. Glad to see others in the thread agree. Let me know how you end up solving this. Good luck.

Let me kick some tires here:

- so she's asking for $70K all in; how much is the whole down payment. Are you and the father paying for the whole down payment? That's a lot to ask to borrow for a down payment. Ether, she's looking at a too big a house or, if this is the entire thing, she has nothing saved which isn't your problem.

- if you want to get out of it, if she's older, just said she should be more fiscally responsible. If she's younger, just say you're not going to lend money to someone that young. 

Overall, I always say, you have to help people from a position of strength and you can't help people if they make bad decisions. Meaning, you have your own mortgage and a family and you said $20K isn't trivial to you. If you invest that right, that pays a large portion of your kids college depending where they go; you're really to give up on that for some lady's house that she can't save for correctly? It would be nice if you did it, I'd consider it a give, but I'd say don't do it. 

70k in a true LCOL is a ridiculous amount lol

First time home buyer? Get a fucking town home or some starter home in the sticks for cheaper. If it's true LCOL this can be done easily for under 200k, which makes a 70k down payment ridiculous. 

Also, fuck the cheapest part of home ownership might be the down payment. If she is broke and the roof leaks, HVAC goes out, etc. what happens then? And that shit will happen. 

Guessing her parents are pushing her, or she is entitled herself, to live in a neighborhood she cant afford or a quality of life she cant afford. There needs to be life lessons here, not handouts.

Heck no, there is no way you should do this. If you ask for the money back, I promise you the family will point the finger at you and say that you are greedy for not just gifting it to her. I have seen this unfold so many times it is not even funny. This EXACT same situation. The easiest response and path to least resistance is to say no. State that you have a mortgage to pay and job security is a bit uncertain. Also say that you think involving money in family affairs can put stress on relationships and you want there to be no stresses in the family.

If they try to pressure you to give in, imagine how bad it will get when that money just does not come back. The sister will probably vanish and avoid you guys. 

If you "lend" them the money you are correct it will be viewed as a gift.  Now what might make sense for you to do is go in with the father in law and buy the property, create an "owner finance" situation where you guys get a loan at say 5% and charge her 7.5% interest.  Make some spread on the rate, control the deed to the property, and give her the opportunity to buy it back from you over time.  If she wants to sell the property then you all have an agreement that the equity gains are split X/Y/Z between you and your wife, the father in law, and the sister in law.   This is the best way to create a win win for everyone.  It gets you out of the situation where you are relying on her to pay you back directly, gives you downside protection if she doesn't pay her mortgage, and allows you to generate at least somewhat of a return on the money.

Agree... good idea in theory, or if they were very willing to pay you back - in practice, trying to collect on this with someone who's already proven they won't give money back is just asking for this to become a huge family blowup settled in court.

The cleanest way is just to simply sidestep this saying you're not interested or don't have the cash at this time

  1. A loan from a third party or a "loan" from you would leave your sister in the same financial position i.e. a need to repay it, followed by the need to budget (with which she clearly shows signs of trouble). So, if she really cares about you, why not expose someone else to the risk of not seeing again $25k? Because of her precedent (not returning the $1k), this should be enough reason for not lending the money.
  2. I'm assuming that your sister-in-law is extremely bad at managing her finances (bad at budgeting and not returning money), so her decision to buy RE may be (i) pushed by the "easy money" perspective on RE (far from the truth, so she may fail) or (ii) the mindset that "being an owner is the path to wealth" without understanding that the costs of buying a property don't stop once you bought it, instead, property tax and other unpredictable costs could reach way deeper into your pocket (again, more lending requests to her brother-in-law).
  3. The money given by her father-in-law shouldn't affect your common sense. He is way more willing to push money because it's her daughter, so it's an emotional decision, not a rational one.
  4. Let's put it another way, lending money without even receiving the $1k back wouldn't make your sister face an issue bigger than the need for $25k i.e. not managing properly her finances and not fulfilling her promises (read: bigger troubles down the line). Be a good brother-in-law by refusing her "loan" (read: gift) and let your sister-in-law face reality and do something about it.
  5. If not, you could also lend her the money and put it into a contract. I mean, there won't be much difference between refusing vs. signing a contract in terms of how she'll react. More so, I think it could be a great lesson for her to see that IOUs are serious and must be met among adults.
  6. Also, this is an extremely subjective opinion, but if you're seen as "wealthy" among your family members, remember that when you loose money your relatives will say things among the lines of "oh, he makes good money, it won't affect him". Because of this perspective, you may risk not seeing again your $25k because well, for him it isn't much money, but for me it is.

#6 is the worst man. Guarantee the family knows his profession and rough idea of the money he makes, and views it as a moral shortcoming that he just doesnt flippantly give it away. It's poor person cope to view themselves superior (i.e. 'well he makes more money but is greedy, I wouldnt be greedy in that situation) despite literally asking for free money. 

Any big purchase made in the future, such as showing up to Thanksgiving in a new car, or husband getting a new watch, etc. will be met with side eyes. "Oh so they can afford X but cant afford to chip in to help put a roof over our poor sweet enabled daughters head" etc. etc.

Am definitely reading too much into this but have witnessed this type of shit firsthand. The high horsing is ridiculous lol

Politely decline saying it's better not to lend to family but you cannot afford to give their desired amount as a gift. Then, give them a generous housewarming gift after they finance the house by other means. I love my brother and his wife but he's the kind of person money runs away from. I would never lend him a dollar but I regularly give him quality gifts. They are very appreciative and I wouldn't want to complicate things by giving a loan. I think if you have a good relationship with them, they should understand your decision.

Let’s also not forget that lenders don’t mess with down payments funded by loans. They check 3-6mo of bank statements for irregular large deposits and usually require a letter from family members stating their transfer is a gift that’s not required to be paid back.

Not only is there no way to transfer them the money without it being caught, but it would literally be baked into their mortgage paperwork that you aren’t getting the money back.

Goddamn TILA. There’s your excuse to say no right there.

Haven't read the whole thread so probably redundant, but I do have experience in this, both as a borrower and a giver (not lender).  Long time ago purchased my first home. Needed help with the down payment. Discussed that with father-in-law. He Loaned me the money and treated it like a real loan. Gave me a amortization table, same rates as the bank, payment schedule, etc. At first I was a little ticked as my family would have just loaned me the money unconditionally with a pay it back whenever you can attitude, so i thought this was very weird at the time. I kept to the schedule and eventually paid it off several yrs early and both he and I were quite proud of how I treated the loan. That was a good lesson. And as a 58 yr old now, I appreciate him formalizing it. Was the right thing to do. After all, I was asking for his capital that he could have been earning interest on, etc.

Flip side, for many yrs, I had to support my parents financially. Bought them a house, cars, insurance, etc. Was a gift as I knew I'd never get any of that back (eventually got some upon selling their house after they passed). Not the same situation but I include it in the discussion simply to address the emotional aspect of giving / lending relatives money. Frequently would get frustrated re their financial decisions when I was paying for things. Why are they going out to dinner? How can they go to that show or game? All these expenses when I'm paying their mortgage. Had to come to terms with that.

Another approach to consider is the idea that if they can't afford the down payment, maybe they shouldn't be buying as many other homeowner type expenses will appear from nowhere and they'll have to be able to afford that. That's actually me best advice. Not to lend them money because of their potential inability to handle the cost of home ownership. Never just the mortgage payment , tax, insurance. Figure at least 1%-5% cost of the property in maintenance and ongoing care. Have owned homes for 30 yrs. Can't think of a yr when that wasn't the case (at least averaged over time).

Given the additional information that it was your father in-law who made the request, you should agree in principle to provide the money and say this to him:

"Some day, and that day may never come, I will call upon you to do me a service in return. Until that day, consider this a gift from my wife, your daughter's sister."

Why does she need this money? Why cant she just rent? What is the urgency in home ownership.

Even if you were in a position where 20k is trivial you should ask yourself these because you would potentially be enabling further behavior. I would almost in no way give the money, and just say you cant afford to. Yoru finances are none of their business. If she cant come up with that money herself, you really think she will do it when a family friend is the lender?

I have had a sibling be in and out of rehab, and a parent with a crippling gambling addiction. Not the exact same as yoru situation but know what it's like when others come to you for $$$. Be ok being the bad guy. If they are asking you because of your job then they are in a way objectifying you for your paycheck lol

Just give them 2 grand as a gift and that is it. Like everybody mentioned either its a gift or you don’t lend.

Not lending might give a wrong impression so to cushion that you can give some amount as a gift.

Whenever someone asked my father for money he just gave what he could as a gift him rather than a loan.

A borrower lender relationship is somewhat skewed and you don’t need that with a family member.

I think you're in a tough spot, but ultimately the answer is resounding *no*, you shouldn't lend your money for the property purchase.

The fact that your wife's sister has a history of not paying back loans is a major red flag. It's concerning that the last time you lent her money for a laptop, it took two years to get the money back after "some pestering". This suggests a lack of responsibility on her part and a disregard for the terms of a loan agreement.

Furthermore, the fact that they're asking for an open-term loan with no interest or set repayment terms is a red flag. It indicates that they don't have a plan to pay back the loan and are not being respomsible. You have your own financial responsibilities to consider. With two young children and a mortgage on your principal residence, you have to be careful with your money. There's no guarantee that you'll be able to recoup the $25k loan, and in the current uncertain economic climate, it's important to be conservative with your finances. The fact that your wife has other siblings who may also come asking for money in the future is concerning. If you lend money to one sibling, it's likely that the others will expect the same treatment which is no bueno.

Politely decline the loan request and explain your reasons for doing so. It may be uncomfortable in the short term, but it's the responsible choice in the long run.

The fact that they'd have the nerve to ask for no interest, no repayment schedule is a conversation-ender for me.  Will not deal with anyone who thinks I should pay for the privilege of doing them a favor.  

This is honestly an easy no.  I get that it's tough with family, but the stress and acrimony will be much higher if you say yes.  No way are they going to pay you back at a reasonable time frame.  I'd sooner give them $5k as a gift and tell them it's theirs to keep because you want to help out, than lend them $25k.

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