Loan between friends - Anything to look out for?

badmemory

They can write as many agreements as they like but if there is no money they aren't going to get paid. They could put a charge on the house but if the priority charges are too high there will be nothing left.

There used to be a saying - neither a borrower nor a lender be. It was very good advice. Lending a significant sum to a friend pretty much guarantees losing both the money & the friend.

If they are going ahead with this then frankly the paperwork doesn't really matter because if the "friend" doesn't want to pay then they won't. In the same way that they landed up needing the money in the first place.

dresdendave

Andrew_Ryan_89 wrote: »

Those going on about not doing it, despite the fact I asked a separate question and blatantly stated that it is little to do with me personally is another typical example of contributors on this forum getting sidetracked.

Those who you claim were side tracked were giving excellent advice, certainly relevant to the scenario posed in the question.


It is generally a good idea when answering a question to look at the bigger picture rather than just answering it exactly as it is worded.


For example if a friend asked you for advice on the best way to commit suicide, would you explain the pros and cons of hanging, overdosing, jumping off a building etc?


Or would you try and talk him out of doing it?

soolin

Andrew_Ryan_89 wrote: »

Guys, I appreciate some of the warnings but the ins and outs, whether it should be done and so on are nothing to do with me. They are both in agreement and both want to do it. The question of this topic was around the contract and what's the best way to do it. Those who suggested getting it professionally written, thanks for your feedback. Those going on about not doing it, despite the fact I asked a separate question and blatantly stated that it is little to do with me personally is another typical example of contributors on this forum getting sidetracked.

In fairness it is something to do with you. 'You' have been asked to look at the contract which means if and when this goes wrong they may be looking to you to find out why . In what capacity exactly are you advising them, do you have a legal background sufficient to advise them on the contract , otherwise what exactly are they expecting from you?

Regardless of your comments about keeping this on topic, if I were you then I would run a mile and not get involved at all. If they want legal advice find them a good lawyer and advise them to have contracts checked over properly.

sourcrates

soolin wrote: »

Regardless of your comments about keeping this on topic, if I were you then I would run a mile and not get involved at all. If they want legal advice find them a good lawyer and advise them to have contracts checked over properly.

Exactly, because when this goes south, its you they will blame for giving them bad advice etc.

I agree.........stay as far away from this as possible.

missile

BrassicWoman wrote: »

you sure this isn't your mum again?

https://forums.moneysavingexpert.com/discussion/5516214

As reported on 26-08-2016, 11:05 AM

Andrew_Ryan_89 wrote: »

When I was still at the property, I would have quite easily been in a position to do so but by the time it got to this urgent stage, I was in the process of buying my own place. Managed to get my little sister a higher paid job (on minimum wage before) and that alone is the reason we got the AIP. Thing is, the max that can be borrowed unsecured is £25k and my sister does not have the salary or credit rating to borrow that amount. It will be great if my older brother, who lives their, could help but he's a bum.

Why don't you borrow the £25K and sister £5K to provide the financial support for your mother?

System

Oh dear, no wonder the OP got in a huff about it. They don't want to listen because they are the "friend" and as far as they're concerned as it is their mother it is happening hence only wanting the advice about how to go about it and sticking their fingers in their ears for the rest.

OP if you're still reading this thread you need to be completely prepared to lose £30,000. You can have everything you want in writing, the most watertight agreement there has ever been in the history of mankind and ultimately all your mother would have to do is declare bankrupt and you are getting nothing.

Personally if it were my own mother she'd be told tough luck for that amount. My parents are utterly !!!!less with their money, have been bankrupt a few times and I wouldn't lend them a penny because I'll never see it so any money I do decide to give them is done as a gift or I'll buy whatever they were needing and call it an early Xmas or birthday present to make them feel better.

PeacefulWaters

Andrew_Ryan_89 wrote: »

Guys, I appreciate some of the warnings but the ins and outs, whether it should be done and so on are nothing to do with me. They are both in agreement and both want to do it. The question of this topic was around the contract and what's the best way to do it. Those who suggested getting it professionally written, thanks for your feedback. Those going on about not doing it, despite the fact I asked a separate question and blatantly stated that it is little to do with me personally is another typical example of contributors on this forum getting sidetracked.

How ungrateful.

gycraig_2

Andrew_Ryan_89 wrote: »

Friend ironically was in a similar situation. Borrowed money for a business venture that went wrong and the bank repossessed his property. When the house was sold, despite having a value of £300k+, he ended up walking away with £80k after the debt was cleared, bank fees and the fact it was sold below market value. He has no family, no job and too old buy another house and start again unless he plans on moving to Blackpool or something.

He has been living rent free for the past 18 months now and it suits him. He's not by himself, doesn't have to pay rent for a property he is just living in and he is close to his other friends.

In regards to him getting his money back, it is near certain. First situation if the house does not sell quickly, he has two people (the lender and the lenders child) who both have decent jobs which make the repayments a somewhat small expenditure for them. Secondly, the house sells (it is up for sale now) and he gets paid back in full.

if 625 pound a month is “small change” why is the house in the process being repossessed ?

molerat

This is similar to phoning up a call centre, asking a question, being given the answer to that precise question then, when it later all goes tits up, complaining that you were not told what you needed to know when you never actually asked for that information. Here you are being told what you need to know and take heed of rather than the precise answer to the narrow question posed.

The answer to that precise question is that you need to take professional paid for legal advice to protect your interests.

HornetSaver

I'll repeat what everyone else has said, this isn't an idea that should be considered at all.

But taking note of post 20, the only advice I can give is to urge the person considering doing the lending to take legal advice so that they fully understand the risk that they're taking on. There's so, so much more to it that "my friend's good for the money and if I'm wrong there'll be £30,000 left over when the mortgage lender sells the house."