Loan from Girlfriend - advice needed

raaaaa

Hopefully this is the correct forum to post this...

I recently paid off my ex-wife to get her name taken off the house/mortgage, so the former matrimonial home & mortgage are now in my sols name.

In order to do this, my girlfriend (of 5 years) who now lives with me re-mortgaged her home (which is now rented out) to free up the cash to pay my ex off. I was unable to do so due to the level of my mortgage, and poor credit rating following the divorce. The amount of money she loaned me was a five-figure sum, so a substantial amount.

Obviously this was very generous of her etc, and I now want to ensure that her position is protected for both of our peace of mind. So I was just after some advice as to the best way to formalise this loan to minimise any risk to her. Would some kind of charge on my property in her name to the amount of the loan be enough? Or would we need to do some kind of legal agreement or contract/trust instead?

Any help gratefully received.
Thanks

his_missus

I can't advise but you could try posting in the Loans section (Pure Money, top of the forum list) I'm sure someone there will be able to explain how to make your loan to your GF official.

InsideInsurance

raaaaa wrote: »

best way to formalise this loan to minimise any risk to her. Would some kind of charge on my property in her name to the amount of the loan be enough? Or would we need to do some kind of legal agreement or contract/trust instead?

What risks etc are you wanting her protected from? You dying? You becoming ill and no longer able to work to be able to pay her off? You running off with another woman/ man?

raaaaa

InsideInsurance wrote: »

What risks etc are you wanting her protected from? You dying? You becoming ill and no longer able to work to be able to pay her off? You running off with another woman/ man?

Many thanks for the reply - yes it was either if something were to happen to me in the near future, or if something went wrong with our relationship & we were to split up. I want to make sure that her position would be potected in regards to the money she's lent me...

devildog

raaaaa wrote: »

Many thanks for the reply - yes it was either if something were to happen to me in the near future, or if something went wrong with our relationship & we were to split up. I want to make sure that her position would be potected in regards to the money she's lent me...

What a refreshingly nice man

Kynthia

Could you ask your solicitor whether a deed of trust would cover this situation. It could specify that your girlfriend gets a certain amount from your property. If it doesn't quite protect her from a relationship breakdown or your passing they could tell you whether a charge on the property and/or a will could.

By the way I think it's really nice when people who love each other try to protect each other financially too, rather than just insist they trust you and get insulted by any discussion of protection. If we all look out for the one we love we don't have to look out for ourselves, and that makes for a pleasant world.

getmore4less

a loan agreement would cover most senarioes it must have payment terms to be enforcable.

if there is headroom on the property that is an option but complicates any sale before the debt is due.

as it is she may be able to claim a share anyway.

InsideInsurance

raaaaa wrote: »

Many thanks for the reply - yes it was either if something were to happen to me in the near future, or if something went wrong with our relationship & we were to split up. I want to make sure that her position would be potected in regards to the money she's lent me...

Insurance such as life and/or income protection would be the norm for protecting the amount against illness or death. A charge could be put on the property but if you fell ill and were unable to work she is unlikely to be able to force a sale to get it back in any sort of reasonable timescale.

As to you splitting up then basic loan agreement would help substantiate it is a loan and not a gift making her life easier to get court judgements against you but again ultimately getting the money will be difficult for her if you want it to be.

maman

raaaaa wrote: »

Many thanks for the reply - yes it was either if something were to happen to me in the near future, or if something went wrong with our relationship & we were to split up. I want to make sure that her position would be potected in regards to the money she's lent me...

If her house is rented out then I assume she's living with you in the property and you're sharing costs/expenses. If that's the case then it's not just a case of protecting the loan she's given you but that you might feel she has an interest in the property moving forward. You might be paying all the mortgage but if she's enabling you to do that by paying other bills that's not really fair on her as you obviously don't think of her as just a lodger. I think you need to think it through before consulting a solicitor.