Consolidating debt buying house
If your relative can’t afford to forgive the loan to save their relationship with you, then this could forever cast a shadow over your relationship with them.
A wise relative may not wish to put themselves or you in a situation like this.
If you find yourself doing this every year or two, that means that you are spending more than you make, and it is going to take forever to get your mortgage paid off at this rate.
You can see if your bank or credit union is able to provide you with a debt consolidation loan.
Debt consolidation means bringing different loans together into a single loan.
One way to do this is to refinance your home loan to encompass your other debt.
If you are able to do both, then you will be able to pay off your debts even more quickly.
If you have a mortgage, you might look to see if you have enough equity in your home to consolidate your debt with your mortgage.
This is usually people’s preferred option since mortgage interest rates are usually much lower than other loan interest rates, and mortgages can be amortized (paid off) over 25 years.
Banks and credit unions are typically only willing to lend people around 10% of their net worth (your assets minus your debts) on an unsecured basis.
So if you ask your bank for a debt consolidation loan of ,000, but your net worth is only ,000, they will probably decline your request.