Loaning £20K.

mollycat

Hi all. Hope this is on the right board.

Looking for some advice.

A friend of mine is buying a house but is a little short regarding her deposit.

I am keen to help out by lending her £20K, she intends to pay me back £22.5K over the next 18 months, a scenario that suits her both.

What i am unsure of is the implications for this;

1. Can I just write her a cheque for £20K?
2. If she writes me a cheque for £1250 each month, do I need to declare this for tax purposes?

Many thanks in advance.:)

poppasmurf_bewdley

If your friend is buying a house and is £20k short of the deposit, then she can't afford to buy the house!

And you are proposing to lend £20k to someone who's buying a house she can't afford.

It's a recipe for disaster.

CH27

Please don't lend her the money.
It will ruin your friendship & there are no guarantees you will get your money back.

If she can afford to pay you £1250 p/m she can soon save what she needs.

NCISROCKS

mollycat wrote: »

Hi all. Hope this is on the right board.

Looking for some advice.

A friend of mine is buying a house but is a little short regarding her deposit.

I am keen to help out by lending her £20K, she intends to pay me back £22.5K over the next 18 months, a scenario that suits her both.

What i am unsure of is the implications for this;

1. Can I just write her a cheque for £20K?
2. If she writes me a cheque for £1250 each month, do I need to declare this for tax purposes?

Many thanks in advance.:)

The short answer is 'don't do this'....the long answer is 'don't do this'.

talana

The mortgage lender will want to know the source of the deposit too.
It has to be the buyer's own cash, not a loan.

iolanthe07

Please, please, read all the threads and posts on here about lending to friends/relatives. Only lend her the £20K if you can afford to lose it, as you surely will.

Murtle

NCISROCKS wrote: »

The short answer is 'don't do this'....the long answer is 'don't do this'.

no, the long answer is 'do not do this'

skintandscared_2

PLEASE don't do it unless you are prepared/can afford to lose £20k. Once they start paying a mortgage, how the heck will they pay you back??? Way too many stories on here of similar loans/guarantor scenarios that have gone horribly wrong. To be honest, I'm not sure I'd even lend money to family after reading some of them!!!

DON'T DO IT!!!!!! :eek:

RichGold

I think you should do this.











Oh wait, I meant whatever you do, don't do this.

I'm always getting those 2 things mixed up.....

Murtle

However, in answer to your question, (and I apologise for my response as I am tired) but someone is going to ask her where she got the 20k from. I think it will be the mortgage lender (from memory) and they'll want to know if it's a gift or a loan, this may raise doubts with them as to how she will be able to afford to pay back the mortgage and you. There may also be questions raised on who is given first dibs on the money as the mortgage lender will like to have all this to themselves, this also happens if someone lives in the property but isn't on the mortgage.

DCFC79

mollycat wrote: »

Hi all. Hope this is on the right board.

Looking for some advice.

A friend of mine is buying a house but is a little short regarding her deposit.

I am keen to help out by lending her £20K, she intends to pay me back £22.5K over the next 18 months, a scenario that suits her both.

What i am unsure of is the implications for this;

1. Can I just write her a cheque for £20K?
2. If she writes me a cheque for £1250 each month, do I need to declare this for tax purposes?

Many thanks in advance.:)

Lend her the money if you want but have you considered what could happen if the 2 of you fell out over something eg if she didnt make the repayments 1 or 2 months in a row and you asked if you would see any extra in next months cheque.

Have you seen this thread, its a very sad affair when 1 friend(even family members) lends another some money and then the 2 fall out over it and the money isnt repayed. Id really reconsider lending the money, its a hugh amount of cash to lend a friend but your choice at the end of the day. Not what you wanted to hear but the truth none the less.