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  • FIRST POST
    • cheapman1
    • By cheapman1 18th Oct 16, 4:30 PM
    • 19Posts
    • 7Thanks
    cheapman1
    Sketchy?
    • #1
    • 18th Oct 16, 4:30 PM
    Sketchy? 18th Oct 16 at 4:30 PM
    Hello all,

    Someone I know is attempting to buy a property to let but can't obtain a big enough mortgage, but could afford It.. He has asked If I will take out a joint mortgage of 50k to bridge the gap, after a year he'll be on enough to remortgage, and I'll be out of the deal at this point. He would be paying me each month directly to pay my side of the mortgage.

    I would be appreciative if anyone has any insight as to the disadvantages of this practise. I want to help my friend but don't want to shoot myself in the foot. I'm not exactly in the healthiest financial state myself.

    Thanks
Page 1
    • SavingSteve
    • By SavingSteve 18th Oct 16, 4:37 PM
    • 482 Posts
    • 206 Thanks
    SavingSteve
    • #2
    • 18th Oct 16, 4:37 PM
    • #2
    • 18th Oct 16, 4:37 PM
    Best advice, don't do it. FAR too many pitfalls.
    • davidmcn
    • By davidmcn 18th Oct 16, 4:48 PM
    • 5,786 Posts
    • 5,536 Thanks
    davidmcn
    • #3
    • 18th Oct 16, 4:48 PM
    • #3
    • 18th Oct 16, 4:48 PM
    I'm not exactly in the healthiest financial state myself.
    Originally posted by cheapman1
    What state will you be in if your mate disappears leaving you with the £50k debt?
    • Scottycameron1
    • By Scottycameron1 18th Oct 16, 4:53 PM
    • 12 Posts
    • 2 Thanks
    Scottycameron1
    • #4
    • 18th Oct 16, 4:53 PM
    • #4
    • 18th Oct 16, 4:53 PM
    Don't do it mate not worth the risk
    • zx81
    • By zx81 18th Oct 16, 4:54 PM
    • 13,187 Posts
    • 13,501 Thanks
    zx81
    • #5
    • 18th Oct 16, 4:54 PM
    • #5
    • 18th Oct 16, 4:54 PM

    I would be appreciative if anyone has any insight as to the disadvantages of this practise.
    Originally posted by cheapman1
    Everything.
    • Thrugelmir
    • By Thrugelmir 18th Oct 16, 4:57 PM
    • 55,207 Posts
    • 48,413 Thanks
    Thrugelmir
    • #6
    • 18th Oct 16, 4:57 PM
    • #6
    • 18th Oct 16, 4:57 PM
    after a year he'll be on enough to remortgage
    Originally posted by cheapman1
    Tell him to wait then. What happens if he isn't?
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • cheapman1
    • By cheapman1 18th Oct 16, 5:07 PM
    • 19 Posts
    • 7 Thanks
    cheapman1
    • #7
    • 18th Oct 16, 5:07 PM
    • #7
    • 18th Oct 16, 5:07 PM
    I should have mentioned he is probably the most trustworthy person I know. That said, I appreciate things can go wrong financially outwith our control.

    He doesn't want to wait because he thinks property prices will have increased by then.
    • ViolaLass
    • By ViolaLass 18th Oct 16, 5:07 PM
    • 5,017 Posts
    • 6,939 Thanks
    ViolaLass
    • #8
    • 18th Oct 16, 5:07 PM
    • #8
    • 18th Oct 16, 5:07 PM
    What's in it for you?
    • cheapman1
    • By cheapman1 18th Oct 16, 5:12 PM
    • 19 Posts
    • 7 Thanks
    cheapman1
    • #9
    • 18th Oct 16, 5:12 PM
    • #9
    • 18th Oct 16, 5:12 PM
    What's in it for you?
    Originally posted by ViolaLass
    Basically, just the satisfaction of helping my friend out. I know he'd do It for me. On one hand It's a no sweat off my back because I'm not actually paying any money and just providing a vehicle for his venture. On the other hand there is the lack of financial freedom I'll have for a year (won't be able to get credit myself - but not sure If I'd really need any).
    • minimike2
    • By minimike2 18th Oct 16, 6:05 PM
    • 1,902 Posts
    • 1,398 Thanks
    minimike2
    You shouldn't even be considering doing this.

    Politely explain that you are not in the position to be able to help with it.
    I am a mortgage industry professional. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice
    • Pixie5740
    • By Pixie5740 18th Oct 16, 8:16 PM
    • 10,826 Posts
    • 14,961 Thanks
    Pixie5740
    What do you mean by a £50k joint mortgage to bridge the gap? Is that in addition to another mortgage because that's not really how mortgages work.

    As a joint borrower you would be named on the deeds and you will need to pay tax on the rental income you receive because it is rental income you'll be receiving regardless of what you and your friend may call it.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • amnblog
    • By amnblog 18th Oct 16, 9:55 PM
    • 9,749 Posts
    • 3,765 Thanks
    amnblog
    Noooooooooooooooooooooooooooooo
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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