*Borrowing Money to an Unmarried Partner: New House*

MonSaveHelp

Hi Folks,

Really appreciate any input as in a rush to sort this out...

Basically I have a unmarried partner who I have offered to loan money too. Its about £10,000.

The money was going to be used for a deposit on a property, but we ran into difficulties with having to have two names on the property and two names on the mortgage as well.

Basically I decided that I would loan my partner money to cover the solicitors costs & fees as my partner had just about enough money to buy the property outright.

I want to provide the money, but also want to protect myself in case I get dumped.

Essentially I want an agreement that:

- Formalises the loaning of the money
- Stipulates that I can request money return on demand
- Provides some sort of interest payment if requested
- Is legally binding and can be enforced
- Is easy to sign and doesn't have to be witnessed

I am unsure if I 'have' to put a 2nd charge on the property in order to enforce such an agreement? I have a feeling this may require the bank lenders consent and be troublesome?

I would also welcome the agreement stating that I can live in the new property - but I assume that may only be possible with a separate AST agreement?

I do need to lend the money in a rush as the property has exchanged and thus these fees are due.

Welcome any views or guidance that can be provided.

Thanks so much.

RAS

Hi are you going to borrow money from them or loan money to them?

If you are providing part of the deposit for a property, ask about deeds of trust etc.

19lottie82

Sorry, but I take it you are using local dialect and to " borrow" someone money, means to lend someone money?

MonSaveHelp

19lottie82 wrote: »

Sorry, but I take it you are using local dialect and to " borrow" someone money, means to lend someone money?

Correct. I will be loaning them money.

(Will see if I can adjust this in my initial posting)

MonSaveHelp

RAS wrote: »

Hi are you going to borrow money from them or loan money to them?

If you are providing part of the deposit for a property, ask about deeds of trust etc.

Thanks. Will be loaning them money.

I can look into a 'deed of trust' - but I understand that I would only get my money back when the property is sold - and this legal instrument requires two trustees for a trust - thus I would have to purchase the property together with my shares stated in a trust deed (too late for that now).

bluedrop

sorry, I am a bit confused. Who is 'them' ? Is your partner buying the property with someone else?

MonSaveHelp

bluedrop wrote: »

sorry, I am a bit confused. Who is 'them' ? Is your partner buying the property with someone else?

Nope. The partner is buying the property themselves. I will be lending them £10k as the purchase will drain them financially.

Will see if I can adjust the initial posting to be clearer.

19lottie82

MonSaveHelp wrote: »

I will be lending them £10k as the purchase will drain them financially.

So how do you expect them to pay you back, and will they prioritise this payment, if you split up.

The advise on here is always, only lend money to a friend or family memeber, if you can afford not to get it back.

Sure you can get as many legal docuuments drawn up as you want, but if you DO split up, you may struggle to get it back. Even if it went to court and he was ordered by a judge to pay it back, it may only be a paltry amount each week.

Just be aware that this will never be risk free, no matter what.

RAS

Hi

I would strongly advise that if you loan the money it is used to towards the house purchase (secured) not to pay solicitors costs and fees (unsecured).

MonSaveHelp

RAS wrote: »

Hi

I would strongly advise that if you loan the money it is used to towards the house purchase (secured) not to pay solicitors costs and fees (unsecured).

Thanks. Appreciate the reply. If I had loaned money to buy the property then I could have been seen as a "beneficiary owner" by the bank lender and this could have jeopardised the property mortgage approval. It was tough enough for my partner to secure bank lending (am sure its the same for a lot of people).

The mortgage and the property has now completed.

Thus I assume you are saying that any loan should be "secured" in some way - and I would assume it is still possible to secure it against the property (probably with a 2nd charge)?

I am unsure if the lender would have any issues with that happening now that the mortgage has been agreed?

The fees are due now and thus I may have to make a unsecure agreement for the time being and make a secure one later. Hope this will work?

InMyDreams

I'm confused as to where you are in the process. You say you have completed. Has your partner already got the keys? Are you already living there?

If not, have contracts already been exchanged? In other words, is your partner now legally committed?

It seems to me that lending your partner £10K is a *very* bad idea unless you are happy with the risk of never seeing that money again. Even if you could get something legal drawn up, that's still no guarantee if there is no money there to pay you back, however good and honest your partner's intentions now are.

If your partner has indeed already exchanged (let alone completed) on this sale, he has been very foolish, in my opinion. It also puts you in an impossible position.