My husband is a wonderful man. We have five kids together and he is working on buildings business to make a better life for us. We are already with three maxed out credit cards plus a personal loan that has several years left at the rate we are paying it off.
Anyway, hubby has this idea that we need to buy land NOW. And if that means getting a loan, then we need to get another loan. So we were offered a loan at the rate of 0.95%! Even I know that's crazy.
told him no, but he won't give up. Please anyone with good money sense out there, what is a respectful way to tell him why this is a bad idea. The repayments alone will be half of my income and the interest one fifth of the total amount. He seems to think we can invest some and that makes it ok. Grrrr. He's not lose ting to "no".
5 Replies
Have you factored in the cost of the rates on this land? Wether you build something or not rates have to be paid.
You also need to think about mortgage insurance which could be a few thousand $ if you don't have a good deposit.
I think you also need factor in what the repayments would be at 1-2% higher.
I can understand your husband wanting to buy land given the extremely low cost of money but it would be a better idea to focus on paying off your debts.
His crazy. Hubby and myself hsve two loans house loan and business loan thats it. We dont even hsve enough credit rating to get a credit card. If the money isnt their in the business or personal the it doesnt get bought simple as that. I strongly suggest finding a really good accountant and finacial advisor to help you get a perspective on all your finaces. Otherwise the fear would be you may not be able to afford to service all these loans and have to file bankruptcy which would mean selling everything you have including your house. Homeless with 5 kids doesn't t sound very fun.
Write it out as said above, with repayments, all other costs, and what if scenarios and then calculate the best and worse case payments and how you'd pay that. Then say No.
Sounds like he's more about dreams and ideas and risk takingwith big amounts to make money / clear debt than dealing with the long term consequences and repayments, so maybe entertain him and put it back on hiM To calculate everything and draw a timeline of when you'd start payments and invest etc and what you'd do with The current debt, and maybe let him come to the conclusioN himselF.