Sketchy?

cheapman1

Hello all,

Someone I know is attempting to buy a property to let but can't obtain a big enough mortgage, but could afford It.. He has asked If I will take out a joint mortgage of 50k to bridge the gap, after a year he'll be on enough to remortgage, and I'll be out of the deal at this point. He would be paying me each month directly to pay my side of the mortgage.

I would be appreciative if anyone has any insight as to the disadvantages of this practise. I want to help my friend but don't want to shoot myself in the foot. I'm not exactly in the healthiest financial state myself.

Thanks

SavingSteve

Best advice, don't do it. FAR too many pitfalls.

davidmcn

cheapman1 wrote: »

I'm not exactly in the healthiest financial state myself.

What state will you be in if your mate disappears leaving you with the £50k debt?

Scottycameron1

Don't do it mate not worth the risk

[Deleted User]

cheapman1 wrote: »

I would be appreciative if anyone has any insight as to the disadvantages of this practise.

Everything.

Thrugelmir

cheapman1 wrote: »

after a year he'll be on enough to remortgage

Tell him to wait then. What happens if he isn't?

cheapman1

I should have mentioned he is probably the most trustworthy person I know. That said, I appreciate things can go wrong financially outwith our control.

He doesn't want to wait because he thinks property prices will have increased by then.

ViolaLass

What's in it for you?

cheapman1

ViolaLass wrote: »

What's in it for you?

Basically, just the satisfaction of helping my friend out. I know he'd do It for me. On one hand It's a no sweat off my back because I'm not actually paying any money and just providing a vehicle for his venture. On the other hand there is the lack of financial freedom I'll have for a year (won't be able to get credit myself - but not sure If I'd really need any).

minimike2

You shouldn't even be considering doing this.

Politely explain that you are not in the position to be able to help with it.

Pixie5740

What do you mean by a £50k joint mortgage to bridge the gap? Is that in addition to another mortgage because that's not really how mortgages work.

As a joint borrower you would be named on the deeds and you will need to pay tax on the rental income you receive because it is rental income you'll be receiving regardless of what you and your friend may call it.