# $10K wedding or $50K interest free home mortgage loan? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [May 27, 2016, 12:13am UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775 "2016-05-27T00:13:38Z")\ **Posts on this page:** 13\ **Page:** 3
**Author:** ![Malthus](https://avatars.discourse-cdn.com/v4/letter/m/85f322/32.png) [@Malthus](https://boards.straightdope.com/u/Malthus)\ **Post date:** [May 30, 2016, 3:21pm UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775/42 "2016-05-30T15:21:31Z")
> [@monstro](#): > > Remember that Dopers typically have a disdain for big weddings (with “big” defined as anything more expensive than of a courthouse ceremony followed by backyard BBQ with paper plates). I think if the offer was $10K versus a $50K home loan, there would be more diversity in opinions. Heh, true - it is really two sets of expectations on display: distain for big weddings _and_ a cultural bent towards real estate purchase as the preferable housing option. After all, the $50 K loan for a down payment isn’t that useful if you _never_ intend to buy real estate. > [@](#): > > I agree, but I don’t think the deal stated when the house had to be bought. If the couple can buy their house whenever they want (like when they’ve finally settled at a location they are both happy and secure with), then that’s a different situation than a requirement to buy the house right now, at a particular location. > > But I can see how the offer alone could pressure a couple into buying before they are ready. I can see that. However, if the deal was $10K for a wedding (presumably, right now) or a promise of a $50K loan some indefinite time in the future, accepting that promise adds a certain amount of risk - most basically, that the offer may not be available for some reason when you want to buy that future house (F in Law dies, goes insolvent, or ceases to like you ;)); or that you may _never_ be in a position or want to buy a house. In our particular case, because we live in an expensive city, it took us many years of renting before we were in a position to seriously consider home ownership - and a lot of people living here could never consider it. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [May 30, 2016, 4:15pm UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775/43 "2016-05-30T16:15:08Z")
It really comes down to $10,000 now towards a one time purchase vs $50,000 interest free to leverage as a down payment on an appreciating asset. So I’m not really sure where the “what would you do” part comes in. Or is the concern you won’t have the $50k to pay bay the FIL in 10 years? ---
**Author:** ![Mangosteen](https://avatars.discourse-cdn.com/v4/letter/m/6a8cbe/32.png) [@Mangosteen](https://boards.straightdope.com/u/Mangosteen)\ **Post date:** [May 30, 2016, 5:14pm UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775/44 "2016-05-30T17:14:48Z")
In his offer, my FIL never stipulated that his daughter and I had to purchase a house quickly or the deal was off. In fact it was almost 4 years after the wedding that we found a home to buy and at that time he generously came through with the loan. As far as not being able to pay the loan back in 10 years, I’m sure if we had taken longer, it would not have been that much of an issue. He stated this fact when we paid him back in only five years and asked why we were in such a hurry to do so. I just felt better getting this loan off my mind as soon as we could reasonably do so. Worst-case scenario. My wife’s siblings were all told of the loan and if we never paid it back, come time for my FIL’s estate to be distributed after his passing, her share would have reflected this unpaid loan in the will. ---
**Author:** ![Malthus](https://avatars.discourse-cdn.com/v4/letter/m/85f322/32.png) [@Malthus](https://boards.straightdope.com/u/Malthus)\ **Post date:** [May 30, 2016, 5:34pm UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775/45 "2016-05-30T17:34:27Z")
> [@Mangosteen](#): > > In his offer, my FIL never stipulated that his daughter and I had to purchase a house quickly or the deal was off. In fact it was almost 4 years after the wedding that we found a home to buy and at that time he generously came through with the loan. > > As far as not being able to pay the loan back in 10 years, I’m sure if we had taken longer, it would not have been that much of an issue. He stated this fact when we paid him back in only five years and asked why we were in such a hurry to do so. I just felt better getting this loan off my mind as soon as we could reasonably do so. > > Worst-case scenario. > > My wife’s siblings were all told of the loan and if we never paid it back, come time for my FIL’s estate to be distributed after his passing, her share would have reflected this unpaid loan in the will. There is no question the decision was the right one for you, as you wanted to own. However, if someone didn’t want to own, the other decision may have been preferable. My point is simply this: that making the decision one way or the other only “makes sense” _depending on what people have already decided to do_: it may not be a good idea to change one’s plans based on the offer. This is clear in the case of having a $10K wedding when one originally didn’t plan to; however, it may also be the case that it could be a potentially bad idea to buy real estate, if one did not plan to. From a purely financial-prudence point of view, buying isn’t always a good idea, as plenty of planners will say: > **[Should you rent or own your home?](https://financialpost.com/personal-finance/young-money/should-you-rent-or-own-your-home?__lsa=a4dd-5b4a)** > > People say that when you grow up, you buy a home. But owning doesn’t make sense for everyone and in some cases, it might be more financially beneficial to rent ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [May 30, 2016, 5:40pm UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775/46 "2016-05-30T17:40:45Z")
Assuming a 5% interest rate for a regular mortgage and a ten year term, and ignoring the principal payment, you saved $25K from taking the mortgage if you had kept it for 10 years - not counting tax benefits and inflation. We gave our kids a budget for their weddings, and if they came in under the budget they could keep the money. But neither of them was anywhere near buying a house when they got married. You should tell this woman that you can’t live in wedding pictures. ---
**Author:** ![monstro](https://avatars.discourse-cdn.com/v4/letter/m/ba9def/32.png) [@monstro](https://boards.straightdope.com/u/monstro)\ **Post date:** [May 30, 2016, 6:02pm UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775/47 "2016-05-30T18:02:21Z")
> [@Malthus](#): > > My point is simply this: that making the decision one way or the other only “makes sense” depending on what people have already decided to do. This assumes people always make the right decisions for themselves, right? I could totally see how the offer would encourage someone to make a better decision than what they would otherwise make. For instance, maybe they were assuming that Dad was going to pick up the _entire_ tab for the wedding. Now that they realize this isn’t the case, they decide to nix the wedding idea completely and do the courthouse+backyard BBQ thing–which saves a lot of stress and headache as well as money. Or alternatively, maybe they were going to do the courthouse+backyard BBQ thing, but now that Dad’s offering to pay, they decide to do it up royal. I think all we can say with confidence is that we don’t know which option is the best one without knowing the couple’s circumstances and what their values are. ---
**Author:** ![Snarky\_Kong](https://avatars.discourse-cdn.com/v4/letter/s/a183cd/32.png) [@Snarky\_Kong](https://boards.straightdope.com/u/Snarky_Kong)\ **Post date:** [May 30, 2016, 7:51pm UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775/48 "2016-05-30T19:51:01Z")
> [@Voyager](#): > > Assuming a 5% interest rate for a regular mortgage and a ten year term, and ignoring the principal payment, you saved $25K from taking the mortgage if you had kept it for 10 years - not counting tax benefits and inflation. Monthly payments on a 50k mortgage for 10 years would be $530, total cost of mortgage of $63,639. Am I missing something to get $25k? ---
**Author:** ![Whiskey\_Dickens](https://avatars.discourse-cdn.com/v4/letter/w/9fc348/32.png) [@Whiskey\_Dickens](https://boards.straightdope.com/u/Whiskey_Dickens)\ **Post date:** [May 30, 2016, 8:17pm UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775/49 "2016-05-30T20:17:21Z")
In my particular situation I would take the 10K towards the wedding. The fiancée and I already have an interest free mortgage (thanks, Mom!), and we’re delaying the wedding date continuously because of the $20K it’ll cost to throw a proper party for our guests. We also have a habit of turning events into lavish fiascos, so the extra $10K would be sorely needed when our $20K wedding suddenly costs $30K. My son’s 2nd birthday this month ended up costing between $1,300 and $1,500. But, 3 weeks later and my family members are still talking about what a blast they had! One issue with taking the $50K towards the house is that you’d effectively have 2 mortgage payments to budget for. One to the bank and one to unca’ in law. Also mortgage lending rates are silly-low right now, diminishing (but not eliminating) the attraction of an interest-free loan. ---
**Author:** ![Malthus](https://avatars.discourse-cdn.com/v4/letter/m/85f322/32.png) [@Malthus](https://boards.straightdope.com/u/Malthus)\ **Post date:** [May 30, 2016, 8:29pm UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775/50 "2016-05-30T20:29:07Z")
> [@monstro](#): > > This assumes people always make the right decisions for themselves, right? Sure, but these types of decisions are often pretty subjective: sure if someone’s really hard up for cash it can be a bad idea to have a big wedding or to become house-poor by buying too much house, but more often it’s just a matter of value judgments: one person may value the safety and stability of home ownership, another may want to live a more nomadic existence (say to move to where job opportunities are) and so want to rent, etc. Why do I say it depends on choices? Look at it this way: if you have _already decided_ to have a wedding worth $10K (that is, the offer isn’t influencing you to have a big party when you would otherwise do the registry office thing), then accepting the $10K wedding is the equivalent of $10K in cash right now, as opposed to a promise of an interest free loan some time in the future. It knocks an expense you already planned on. > [@](#): > > I could totally see how the offer would encourage someone to make a better decision than what they would otherwise make. For instance, maybe they were assuming that Dad was going to pick up the _entire_ tab for the wedding. Now that they realize this isn’t the case, they decide to nix the wedding idea completely and do the courthouse+backyard BBQ thing–which saves a lot of stress and headache as well as money. Or alternatively, maybe they were going to do the courthouse+backyard BBQ thing, but now that Dad’s offering to pay, they decide to do it up royal. It could go either way: it could influence a better or a worse choice. What it will do for sure, is require commitment to one of the two choices. Someone who would rather do the registry office thing and plans on renting forever (maybe because they are both ‘nomadic academic’ types, going from contract position to contract position - alas, I know all too many in that boat) will have to think again, or forego the gift entirely. > [@](#): > > I think all we can say with confidence is that we don’t know which option is the best one without knowing the couple’s circumstances and what their values are. That we can all agree on. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [May 30, 2016, 8:52pm UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775/51 "2016-05-30T20:52:44Z")
What would the interest on a 10 year, 50k loan be? At 3% it would be about 8k after 10 years. At 4% it is 10,700. Aren’t they offering rates of around 3% on a 15 year fixed, and a 10 year would be even less. I’d still take the money, but arguably you lost a few grand by taking the 50k assuming you have good credit. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [May 30, 2016, 8:56pm UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775/52 "2016-05-30T20:56:10Z")
> [@Snarky\_Kong](#): > > Monthly payments on a 50k mortgage for 10 years would be $530, total cost of mortgage of $63,639. Am I missing something to get $25k? :smack: Nope. Had to divide by two twice (100 K -\> 50K then 10% -\> 5% and only did it once. Might not have been a good deal after all. ---
**Author:** ![Mangosteen](https://avatars.discourse-cdn.com/v4/letter/m/6a8cbe/32.png) [@Mangosteen](https://boards.straightdope.com/u/Mangosteen)\ **Post date:** [May 30, 2016, 10:06pm UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775/53 "2016-05-30T22:06:59Z")
OK, I’ll throw this into the mix. We still live in the home we bought at $175,000 29 years ago and it is now worth north of $700,000 (and was paid for in full 10 years ago). ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [May 30, 2016, 10:31pm UTC](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775/54 "2016-05-30T22:31:14Z")
I missed the part where OP said they paid the loan off in 5 years. At those rates, assuming 3%, that means you would pay less than $4000 in interest. I still would’ve taken the money, the house is worth 4x what they paid for it. But still, saving 4k in interest vs getting a 10k wedding is hard to gauge if a wedding is truly important to you. I would still take the money for a home loan though. [Previous page](https://boards.straightdope.com/t/10k-wedding-or-50k-interest-free-home-mortgage-loan/755775.md?page=2)