Taking a loan out for my mum

R_K88

Hi everyone,

This is a very personal and sensitive issue but I thought I would reach out to see what the general consensus is on my problem.

My mother is going through a particularly difficult divorce from my dad at the moment (although I'm sure all divorces have their own measure of stress). We have a lovely big house in Zone 2 London which should have got snapped up ages ago had it not been for my father's poor building management when the house was being renovated. You see, he did the extension without planning permission (amongst a load of other things ).

Naturally, this has caused a lot of difficult when it comes to buyers as they don't want a 'tainted' house.

My mother has borrowed money off two of her friends to pay her legal fees and needs to pay them back in 2 months' time and was planning on paying them back with the money she gets from the house, but this is proving difficult at the moment while we try to find a buyer. She asked me if I could take a loan out for her in the mean time and I'm facing a massive dilemma (she said she would pay it back for me but she can't take a loan out herself due to her financial situation - she's self-employed and can't get a loan out).

I'm at the beginning of my career, have never taken out a loan and want to be able to buy a property in the next few years. Will taking a loan out affect my credit status in a few years time ?(even if my mum pays it back on time - she has a perfect credit score)

Thanks and apologies for my rambling message!

Alter_ego

Never borrow from, or loan to friends or family.

If mum has a perfect credit score why can't she take the loan?

foxy-stoat

As long as you make sure that your loan repayments are paid on time, it will not have any negative effects on your credit history. If you cannot afford to make the repayments then do not take out the loan.

As long as the loan is paid back in full before you start the mortgage process, it will have no negative effects on your affordibity.

bishopsgirl

Being self employed does not mean your mum could not get a loan.

I would be wary of getting a loan for her.

Can you afford to pay it back if she does not?

MandM90

I would only do it if you're totally willing to 'gift' her the money.

If anything does not go to plan, for any reason, and she can't pay off your loan, it would cause terrible tension. I'm not sure why she thinks she can't get a loan though!

R_K88

Thanks everyone for your messages, much appreciated! So she can't take out a loan because she has a joint mortgage with my dad on the house and they won't let her re-mortgage the house again. My parents renovated the house into separate flats and my mum relies on the rental income from upstairs but the bank has said this isn't sufficient enough as an income in its own right. She has a freelance job which doesn't pay enough to get her a mortgage. I hope that makes sense but please let me know if it doesn't!

R_K88

Thanks for your reply! So she can't take out a loan because she has a joint mortgage with my dad on the house and they won't let her re-mortgage the house again. My parents renovated the house into separate flats and my mum relies on the rental income from upstairs but the bank has said this isn't sufficient enough as an income in its own right. She has a freelance job which doesn't pay enough to get her a mortgage. I hope that makes sense but please let me know if it doesn't!

tiger_eyes

Only do this if you're genuinely able and willing to repay the loan yourself if your mother can't. If you do go through with it, don't let her repay the lender directly - she needs to pay you by standing order so you can repay the lender each month without fail. She may have the best of intentions, but there are a hundred scenarios in which she may not be able to make repayments on time.

Pixie5740

Fine your mum can't get a mortgage but what about a personal loan as I'm assuming it's a personal loan you would apply for to give her the money. Being self employed shouldn't be a barrier for a personal loan. If lenders are telling her that she doesn't meet affordability for a personal loan then that should sound off alarm bells to you. How does your mum propose to make the repayments?

R_K88

So she would pay me back with the income she receives from the studio flats upstairs - we have 5 flats upstairs which generate an income of £60,000 a year but this of course pays off the mortgage first.

This has been really helpful, I need to think carefully about how she plans on paying it back and perhaps as a last resort I could get a small loan out for her. But only as a last resort.

DCFC79

Credit scores aren't taken into account when it comes to loans, its whats on the credit file.