Loan from friend!

scotslad1983

Hi everybody,

I am in the early process of buying my own first home - a first time buyer, so all debt is seen as outgoings, and crushing my affordabiility etc. I don't spend on my credit card, and don't struggle to meet payments, but I don't pay enough off to substantially reduce it. My Dad, who does not know about the debt (£5000) is giving me a £25000 deposit on the house - of which I've given him half. I'm looking to borrow about 4 times my salary of £20k, but cannot afford that with my debt.

My close friend, however, who I have helped out financially in the past, helped him cut bills etc, and lent him money when he was at a really low point with money, has offered me a lend of £5000 to clear this debt temporarily. (he has just split up with his fiance, and has left her the house, but takes £36k with him that he had paid already). He knows I really want this house, and once in, will do everything to pay him back.

My basic question is: when the solicitors/lenders search my record, will they question a recent paying off of credit card etc? Also, it is legal? I wondered about money laundering, if this comes into it? Must keep this a secret from my Dad, as if he finds out I've got any debt, he'll pull the plug on his half of the deposit. I don't mind living inside and amusing myself once I have my flat saving money on going out etc, but I can't keep living under my parents roof!

Can anybody out there help?

chani1

its not always good to lend money off friends, However you seem to trust each other with finances in the past, it would be cheaper to borrow it off him at 0% int. As a loan/mortgage advisor if your debt is paid they have no right to mention or question it as the debt is settled and should have no problem with lending you the cash. Personally if it is a good friendship I think its a great idea and enable you to buy your house sooner just make sure you set up a so to pay your mate off each month....good luck in your new home

mountainofdebt

Agree, dynamics of a friendship can change when money is involved.

I know this is usually suggested when you are the person lending the money but it might be an idea to have some sort of written agreement detailing the loan, the repayments, when they are due and details of any interest payable.

The reason I suggest this is that if for some reason your friend decides he wants his money back, then there would be no pressure on you to find the outstanding sum.

I would also ensure that all repayments are made through a bank account as then there is a paper trail in case of any dispute

Robert_Sterling

You have some debts.
If the lender knows about them they might not lend you the money you want.
If you told your dad the truth he woud not give you the money to help you get a house.
A friend is willing to lend you some money.
So your dad will not learn the truth
and your mortgage lender will not know the truth.
No further comment from me.