My parents are in severe debt and want me to take out a bank loan for them. Is my solution to their problem viable?
My dad was laid off in June 2016 and has struggled to find a stable job since. He and my mom live in a $350k house that they’ll never pay off. I’ve told them until I’m blue in face to sell the house and find a cheaper living option but they refuse to do so.
This morning he sent me this email:
“I am in deep financial turmoil and need help. My credit is shot and can’t get a loan on my own. I need $6,000 for the following expenses.
Mortgage $3,800.00 Neighborhood HOA $1,400.00 Utility_Gas $288.17 Utility_Water $202.36 Utility_Electric $191.00 Wells Fargo $140.00
You can get a personal loan for me from Sun Trust or Wells Fargo bank. I will make the monthly payments till the loan is paid in full. If you don’t want to do it or, can’t do it, please let me know.”
The last thing I want is a high interest bank loan in my name, but I also don’t want my parents to be broke. My solution is for them to sell the house, pay off the mortgage and get back the roughly $70-$80k they have tied up in it, and use that to rent somewhere cheap. That amount could potentially sustain them for years until my dad is old enough to collect social security (he’s 61 now). However, I don’t know a lot about how mortagages and home ownership work to know if this is a viable plan. Any advice is appreciated.
EDIT: To clarify, these are not just one month’s worth of expenses. Their monthly house payment is about $1600/month and the HOA fee is yearly, but both have late fees because they’re overdue.