He warned his cousin not to buy a house he couldn't afford, but he did it anyway. Now relatives expect him to use his savings to get the cousin out of debt.
“More money, more problems,” rapped The Notorious B.I.G. once upon a time. And it seems not much has changed since then.had a fall-out with his cousin over inheritance and they’re no longer speaking. So imagine his surprise when he was inundated with calls from family members years later, nagging him to “donate” his hard-earned savings to that same cousin. The cousin had gone against advice and bought a “ludicrously expensive house” that he couldn’t afford.
Investopedia says it’s important to consider how lending money to a relative could impact your own financial situation. “For instance, if lending money to someone would put a strain on your own finances and make it difficult to keep up with your bill payments, it’s probably not the best move,” warned Investopedia. “On the other hand, if you have a sizable emergency fund, little or no debt, and you’re getting a steady paycheck, making a loan might not be as difficult to manage.
But it’s crucial to have a contract in place. “The IRS considers money you lend to a family member to be a loan only if you sign a loan agreement, charge interest and try to collect ,” cautioned the company. “If you fail to meet all three requirements, the IRS can say your loan was actually a gift that’s subject to the gift tax.
Many people entered what’s known as forbearance. It’s when a bank lets you temporarily stop paying your loans. The report found that ”a year into the pandemic, a significant share of mortgage borrowers remained in forbearance programs or had delinquent loans.” It further stated that those who were already struggling before the pandemic were likely to battle to get back on their feet and could risk losing their homes.
People were curious to know whether the cousin had bought an overpriced house or an average priced one in an area he couldn’t afford“Donate one dollar”: Netizens weighed in on the issue, with most agreeing the man should hold onto his savings and not feel guiltyBy entering your email and clicking Subscribe, you're agreeing to let us send you customized marketing messages about us and our advertising partners.
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