Question about buying a house outright

cossydt1

My friend, who owns a very successful business in American has offered to loan me the money to buy a house so we can save on the interest of a mortgage and all the other fees involved. What are the disadvantages of this and what would your advice be. 
Thanks

ballyblack

how soon does the lender seeking repayment?

qwert_yuiop

Currency fluctuations? Will they want to be repaid in $US? Could turn out as a great advantage or a total disaster. 

Also, you’re going have to prove your American friend is not rich due to smart investment in the cocaine  trade or similar.

Old_Git

How much interest are you saving every month. 
What happens if your friend needs the money back earlier 

qwert_yuiop

Old_Git said:

What happens if your friend needs the money back earlier 

Good point. I’ve heard of friendships and family relationships wrecked by exactly this.

motorguy

Whats the payback terms?   Is it simply the cost of the house split in to say 300 monthly payments?

Redwino222

What happens if your friend goes bankrupt?  Or you fall out?  Or he dies? Or she/he gets married or divorced.

I wouldn’t dream of doing this.  Ever.  But if you go ahead get lots of legal advice.  I am sure he/she will.

liamster

If you draw up the terms of the loan through a solicitor and cover all possible outcomes for something  to go wrong ( ie you suddenly decide not to pay it off and do a runner )  wealthy people do this with a pre nup before they get married
go for it, if its going to save you a fortune and suits you both

qwert_yuiop

It might be a good idea if he’s in a position to pay the loan off soon. I can’t see a 25 year (or more) traditional mortgage working here.
”Pre nups “ apparently don’t stand up in Northern Ireland law. You can draw up any agreement you like with anyone, but it’s void the moment you walk out of that church. 

Down south, the Irish farmers’ association has been pushing for pre nups to be recognised for years, as a lot of young farmers have been the victims of what’s been called slow motion mugging. In Holland, pre nups are compulsory.