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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4542
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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my partner has deposited 68,000 against a loan for that amount

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my partner has deposited 68,000 against a loan for that amount for children to help them get into housing. They have been advised by their accountant to pay interest only on their mortage so they can pay off a personal loan and car loan debt. my partner was not approached and asked just go to bank and sign papers. I believe their accountant should have advised them to pay the 68,000 loan out first if they had have known this. I have tried to explain to my partner that these kids are getting themselves into more debt as they have tried to finance the property but do not have enough equity to cover the loan themselves. can you please advise us.

Rakhi Vasavada :

Dear Friend,

Hello and welcome. Thank you for using Just Answer. Let me try and throw some light on your issues.

Rakhi Vasavada :

As I understand from your question, I understand that the 60,000 you are referring to is deposited to get them a mortgage loan, i.e. interest only mortgage loan.

I too agree with you. The car loan and personal loans carry much higher rate of interest than mortgage loans and they are one of the most expensive debts. They should be addressed first, if possible.

In my opinion, your accountant, i.e. your partner's accountant should have explained you this. By not doing this, I believe, he his pushing your children into MORE debt and not doing any good to them.

What you need at this hour is to prioritize your debt. Pay for mortgage ONLY IF it is mandatory and required the most. OTHERWISE, the costly debts such as personal loan and car loan should be retired first.

Rakhi Vasavada :

You can certainly seek discussion on this issue with your partner before he goes and signs the papers. Mortgage loan is important, I do not deny that, but if money is available, then they should be first allocated to retire costly debts.

Rakhi Vasavada :

I am sure this would help.

You may please leave a positive rating if this helps as this is the only way we get credited for assisting you. Alternatively please feel free to reply with further queries if you have and I would be more than happy to assist you further.

Warm Regards

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