Strong family tie is one of the characteristics of a Filipino family. Buying a big house for the purpose of accommodating new immigrant relatives is good and bad.
It is good because it could preserve close relationship among relatives. Moreover, the burden is reduced in paying mortgage, property tax and utilities for new immigrant relatives could help pay those expenses. In addition, if you have children need babysitting, you may save on your babysitting expenses for your relatives may help you in taking care of your children.
On the other hand, it could be bad if new immigrant relatives would move out earlier than later because of family conflict that the only solution is to live separately. When this happens the welcoming relative who bought a bigger house believing that his/her new immigrant relatives would stay longer and could help him/her pay for the mortgage, property tax and utilities would be left alone to unnecessarily pay for a big mortgage.
It is not surprising there are some welcoming relatives went broke when relatives who lived with them prematurely moved out to their own dwellings.
A good illustration was a couple who sold their smaller house and bought a bigger house in anticipation of the arrival of their relatives whom they sponsored as Canadian immigrants. At the outset, they already had difficulty in securing a mortgage on the new big house because their income did not meet bank’s requirement. To get a mortgage, they engaged the service of a mortgage broker.
When their relatives arrived, they stayed with the couple for few months only because of conflict between in-laws. As a result, the new immigrants moved out and rent an apartment of their own.
The couple was stuck with a big house and a big mortgage. They tried to keep the house for almost one year despite their difficulty in meeting the mortgage payments. Finally, they defaulted payments on their credit cards and loans for they gave priority in paying their mortgage. To ease their financial pressure, they decided to file a consumer proposal to avoid bankruptcy.
Nevertheless, their finances remain on a shaky ground because of their big mortgage payments. If they could not improve their income, it would not take long they would ultimately lose the house. Whether they could keep the house or not their credit ratings were already damaged.
Providing accommodation especially to new immigrant relatives is a commendable act and consistent with Filipino family attribute of strong family tie. However, it is a wrong motivation to buy a bigger house to accommodate relatives, for it may end to a financial ruin as in the above example.
Adam Aspilla is a Senior Financial Counselor of the Debt Clinic of Canada Inc. and the author of the book, You Can Negotiate All Your Debts. He also writes a biweekly column, “What Matters In Life” in “Taliba Newspaper. For free initial, professional and confidential consultation, please call 905-306-7572.