Loan to Friend-what shall I do?

Nebulous2

One possible option is to refuse, making it clear it is you and not your wife. So she can say "I was quite happy to lend you the money but unfortunately XX has refused because he thinks it is a bad idea."

I sometimes do something similar at work where somebody is struggling with a difficult decision which is going to cause problems I make it clear the final decision was mine. I don't use it very often, I usually encourage people to take responsibility for their own decision-making, but occasionally if it is likely to damage a relationship and people work closely together on a daily basis it helps to externalise it.

AnotherJoe

Mr_bob wrote: »

My only positive feelings towards it is, making it formal via a solicitor, so I have recourse.

You need to understand that you absolutely cannot do this, or it will invalidate the purpose for which it intended to be used as lenders dont want a deposit to be made up of other loans.

Having said that, you could be cute, as long as your wife isn't reading this. :cool:

You say "OK I'll loan it as long as you sign an agreement agreeing its a loan which will be repaid on such and such terms and that I pay the money directly to the solicitor dealing with the sale." Sounds reasonable, right?

When the solicitor sees this agreement they will tell the mortgage co who will say "we cant agree to that" and maybe you've wriggled out scott free?

rtho782

When they come to put down the deposit, the solicitors will ask for proof of funds. They will then ask where this £3k came from. As soon as they say it is a loan, the mortgage offer will be withdrawn.

If they say it is a gift, they will want you/your wife to sign a disclaimer saying it is a gift and you do not expect it back.

This will not work.

smithers1981

Time to put your foot down and say NO..... if you lend it this is going to really eat away at you, and cause resentment towards your wife.

You could be losing a wife as well as £3k........

Time to nip this in the bud.

Candyapple

Mr_bob wrote: »

I would like to thank all that have contributed to this post , its has been very helpful. The matter is still outstanding and I am unable to find a solution. Im still 100% against it.
My only positive feelings towards it is, making it formal via a solicitor, so I have recourse. The only other way forward is to split our finances and then my wife can do what she wants with her half. In either case, I would not engaged with her friend, here or at the new home. Already it has caused problems.

Don't do it Bob.

If it’s causing this much problems already and you haven’t loaned the money yet, imagine what bad feeling there would be if/when the friend fell behind on repayments/stopped paying altogether? You will forever be irritated at losing £3k (despite what you may think now and even though you said you can ‘afford’ to lose it) and your wife will bear the brunt of your irritation and perhaps would lead to further arguments down the line. Is it worth it?

Out of interest, what repayment plan has the friend proposed? If it is supposed to go towards a mortgage, the friend will surely be overstretched for the coming months, how will she be able to afford the loan repayment on top of mortgage, other costs etc.? It just has bad news written all over it.

Mr_bob

Candyapple wrote: »

Don't do it Bob.

If it’s causing this much problems already and you haven’t loaned the money yet, imagine what bad feeling there would be if/when the friend fell behind on repayments/stopped paying altogether? You will forever be irritated at losing £3k (despite what you may think now and even though you said you can ‘afford’ to lose it) and your wife will bear the brunt of your irritation and perhaps would lead to further arguments down the line. Is it worth it?

Out of interest, what repayment plan has the friend proposed? If it is supposed to go towards a mortgage, the friend will surely be overstretched for the coming months, how will she be able to afford the loan repayment on top of mortgage, other costs etc.? It just has bad news written all over it.

None yet. My wife has told me that all her friends are telling her the same as on here - a big NO NO.

Mr_bob

robatwork wrote: »

Bad idea



Terrible idea.

You should do everything with your wife as a couple - a split in your finances will only cause problems later. Make this decision as a couple, even if one of you has to compromise.

For the sake of your marriage you should go with my option 2) above

I cant see a compromise , we can only agree not to do it. My wife has suggested, her mother may lend it to her. Im lost for common sense here.

Mr_bob

smithers1981 wrote: »

Time to put your foot down and say NO..... if you lend it this is going to really eat away at you, and cause resentment towards your wife.

You could be losing a wife as well as £3k........

Time to nip this in the bud.

I am saying no and have explained to my wife why I feel like this. My wife has expressed her feelings on this also. Our money is our money and decisions are made together. I am unable to see a compromise .
Saying that...
My wife has taken the steps to tell her friend on Friday, of the problem it is causing between us hoping that her friend would take the initiative and say forget it ? Her friend never did and has now gone quiet on her.
WHAT A BLOODY MESS!

maisie_cat

I also wouldn't, I am one of those people who thinks the best of others and I have loaned money 4 times. 1 was repaid quickly, 1 was repaid but it took 10 years, the other 2 have not been repaid and both the brother and my husband's former best friend are no longer around to chase.
I don't know if it's relevant but the 2 that were repaid were both sisters, is there a gender effect on honourable behaviour?

Mr_bob

Thanks again for all the sound advice on here, its been very supportive. I have no one to turn to and feel isolated on this matter. My wife has told me that she has spoken with friends and they are all telling her not to loan the money. Now I feel terrible that my wife is being made to feel the fool. I don't like to see her (or anyone) made to look stupid.

Can I not appreciate what 3k can do-am I being mean?
The house is 95k, she has a 20k deposit. Surly you can get a first time buyer mortgage for 75k. What difference would 3k make anyway?