56 year old homeowner can get a loan?

CLN

Hi, sorry for the late reply, my internet was down all day Yesterday.

I meant 20000 not 2000 haha. But actually the reason for the loan is to help my son start up a business, as he hasnt lived in the UK for 10 years and is unable to get a loan for himself. He says he can pay back the money within 4-5 years so to borrow for longer than that would cause unnecessary cost, although I guess if the bank will refuse me for 5 years I could make it a longer term.

Any suggestions?

AMILLIONDOLLARS

If he couldn't pay you back, would this be a problem? If not sounds like you'd have to remortgage, have you tried your bank first?

For such a sort lending period, I can't see anyone lending on this basis. What about selling and downsizing to release the capital?

AMD

CLN

Of course it would be a problem but I have a lot of trust and respect for him and the business is a very low risk type. In any case I am willing to risk my house for it. I actually dont quite get why the banks would care so much considering my house is worth so much more than the loan, if it was more than half the value of my house I might understand them not wanting to accept me.

But anyway, I wouldnt like to sell this house to release the money but other than that what would my best option be? I can make the term longer but I also need to keep the cost of the loan down as much as possible.

dtsazza

If you tell potential lenders what the loan is for, I expect they'll be reluctant to lend to you for that purpose. Don't forget that they have specific business loan departments, staffed by people who are used to evaluating business plans.

If your son's business really is planned out and low risk, he shouldn't have any problems getting a business loan for himself. And if he can't, you probably won't be able to get one for him - and besides, if experienced "professionals" judge that the business plan isn't a sound one with a reasonable chance of success, it seems a bit imprudent to ignore that judgement and lend anyway.

That said, if you're determined to go down this route, you may find some lenders who'd give you a personal loan to lend to another family member's business.

AMILLIONDOLLARS

CLN wrote: »

Of course it would be a problem but I have a lot of trust and respect for him and the business is a very low risk type. In any case I am willing to risk my house for it. I actually dont quite get why the banks would care so much considering my house is worth so much more than the loan, if it was more than half the value of my house I might understand them not wanting to accept me.

But anyway, I wouldnt like to sell this house to release the money but other than that what would my best option be? I can make the term longer but I also need to keep the cost of the loan down as much as possible.

The reason I asked, is that if for whatever reason he could not pay you back, could you make the repayments on the loan, because ultimately it would be your responsibility, the route I would take if you really want him to have the money is to either sell and downgrade or act as guarantor being the second option you would still be responsible but as a second line of defence. Your son being much younger than you might have a better chance of borrowing the money on a guarantor basis.

AMD

geoffky

You are mad if you do this....your house is at risk and we are in the middle of the biggest recession the world has ever seen..you will lose your house..

CLN

No offence but I am smart enough to know the risks involved in this. There are a lot of reasons I decided it is more than worth to take them. I could go into details and explain in depth why I believe the risks to be minimal and why it I am not "mad", but I would rather people just trust that I have my reasons and help me to do what I have already decided to do.

DCFC79

CLN wrote: »

No offence but I am smart enough to know the risks involved in this. There are a lot of reasons I decided it is more than worth to take them. I could go into details and explain in depth why I believe the risks to be minimal and why it I am not "mad", but I would rather people just trust that I have my reasons and help me to do what I have already decided to do.

Ok well as suggested your son needs to get/apply for a business loan, he needs to do a business plan first.

CLN

That would be the best option but because he has been living abroad for the last 10 years and has no university degree im pretty sure this is not an option.

sharp910sh

Can you afford the repayments if he goes bust? simple. You cant predict the future, you do not know what will happen down the line. If you could predict the future you would be pretty rich! If you cant afford the repayments you will lose your house. What is the business BTW?