Lending money to sibling

Pollycat

I agree with the 'don't lend money if you can't afford to write it off' mantra.

We loaned my sibling a reasonable sum of money - probably around a year's salary at NMW - by taking out a low rate bank loan instead of the stupid amount of interest they were considering paying. We chose to do it that way instead of releasing investments.

It was for a good reason and sibling was in a very different situation to the OP's.

The arrangement ran for a number of years.

Sibling has repaid every penny (we're very proud of them).

But I don't think we would have loaned money on the basis that the OP is outlining.

I wouldn't believe they are as comfortable off as outward appearances indicate.

Lots of people who have good jobs, a nice house, 2 newish cars and spend openly are in debt.

The reason for our loan arrangement was very transparent.

I don't think the same is true of the OP's situation.

It sounds odd to me that they have had essential work done on the house that the OP's sibling is paying for from their savings account.

I know people manage their finances differently (our money is shared) but essential work on a jointly shared house being funded by one person...?

In the OP's position, I would leave the Dad to bail out his child.

boldaslove

getmore4less said:

Who has been driving all this essential work on the house?

I don’t know the answer to this. It’s a very old house and seems to need a lot of upkeep. In most of our conversations they’ve talked about floors, windows etc being done. Apparently the windows now need replacing - both they and my dad insist that this is urgent and needs sorting ASAP.

sheramber said:

What are they fighting about? Money?

They implied this although we didn’t go into it at length, I was so blindsided by the request I kind of wanted to get off the phone to process it! Unfortunately we know historically they argue a lot and always have done but it seems to be escalating now (or they’ve hidden the true scale of it from us for a long time). If we ever travel to visit them we can’t stay with them at their house and instead need to book a local hotel for a couple of nights. Their house is pretty big, so I can only think they don’t want us staying there as we’d see the arguing. 

Grumpy_chap said:

Conversely, the sibling has lived beyond their means to have much that the OP has not yet enjoyed

Nor would I say that the father should advance make the gift to the sibling, but that is not the OP's decision.  Will the father also make a similarly large gift to the OP?

This is what set the ball of doubt rolling for me. Without wanting to sound ungrateful, living with my partners family for such a long period has at times put a lot of strain on our relationship and we’ve sacrificed a fair bit for this goal of buying a house. 

I actually called my dad again last night to express my concerns and they’ve offered to bail my sibling out for the full amount, but this worries me equally. My dad is retired, he’s not living on the poverty line but he’s not rolling in money either. I don’t want him to get into trouble over this but I guess ultimately that’s his decision. He said he’d do the same for me, but I don’t think I’d ever feel comfortable asking him for this much money. Everything I’ve planned is to prevent that - I don’t ever want to burden anyone financially in the future.

Sea_Shell said:

You seem to still be wavering about the loan?     Don't let them play emotional games with you.     The words you need are "No, sorry"    If your Dad wants to get involved, that's up to him.    If he's happy to gift to one child and not the other, again that's his decision.

If they both have a problem with you saying NO, that's THEIR problem not yours.

Stay strong, and good luck.

Thanks for this, writing it out and seeing some impartial opinions has been really helpful. I think I just wanted some moral backup as my dad was leaning towards lending the money. I think unfortunately he’s told my brother we’d split the amount between us (which I didn’t 100% agree to as I said I wanted to speak to my partner first) so there’s probably going to be a lot of upset when I tell them I don’t want to go ahead with this. 

boldaslove

Pollycat said:

It sounds odd to me that they have had essential work done on the house that the OP's sibling is paying for from their savings account.

I know people manage their finances differently (our money is shared) but essential work on a jointly shared house being funded by one person...?

Yes this sounds odd to me too. Unless they’re both funding it. But to quote the numbers they’re saying they need £13000 to replace the windows in the house so that’d be £26000 if they’re splitting it. That seems a bit extreme?

boldaslove

I’ve held back from posting this too because I’m worried they might by coincidence come across this post and be angry about me disclosing this, but my sibling has also told me this can’t get a loan because their spouse works in the financial sector (in a very senior position) and this would break the terms of their contract. Has anyone heard of this before? It seems crazy that someone’s spouse can’t get any form of loan or credit because of their work?

chelseablue

Honestly, do not do it. 

Families and money never mix well usually 

Use YOUR money for YOUR future with your partner 

I dont know what kind of house they live in but we were quoted just under £5,000 to replace all the windows in our 3 bed semi. And we're in the South East 

elsien

A mortgage is a loan. I presume his name is on the mortgage - how does that fit in with the terms of his contract?

Someone who is in senior finance may have queries raised if they are taking out loans because they are in debt and can't manage their finances, in the same way that bankruptcy etc rules you out of some jobs but (and am no expert) I can't envisage a contract giving a blanket ban.
However there is one easy way to check for sure  - ask to see the specific contract term.

I still wouldn't lend to them, but it might help your dad in his decision. 

Pollycat

OP

From your very recent posts, I think your sibling may be being economical with the truth.

I would step away now.

Your Dad is an adult.

Don't let his decision to loan money sway you.

Be prepared for this to possibly change your relationship with your sibling.

I was once asked by a sibling (not the one we loaned money to) to be guarantor for a mortgage. Yes! Really!

It was asked casually during a chance meeting as if they were asking to borrow a fiver until payday.

We refused for a number of very good reasons and it caused a lot of trouble within the family at the time.

Future events proved that we were 100% right not to do this.

k12479

boldaslove said:

Pollycat said:

It sounds odd to me that they have had essential work done on the house that the OP's sibling is paying for from their savings account.

I know people manage their finances differently (our money is shared) but essential work on a jointly shared house being funded by one person...?

Yes this sounds odd to me too. Unless they’re both funding it. But to quote the numbers they’re saying they need £13000 to replace the windows in the house so that’d be £26000 if they’re splitting it. That seems a bit extreme?

That's not essential work. Essential work is if a window pane is broken or a window frame is so badly deteriorated water is entering the property. That appears to be a discretionary upgrade or a poorly planned refurb.

Sea_Shell

boldaslove said:

getmore4less said:

Who has been driving all this essential work on the house?

I don’t know the answer to this. It’s a very old house and seems to need a lot of upkeep. In most of our conversations they’ve talked about floors, windows etc being done. Apparently the windows now need replacing - both they and my dad insist that this is urgent and needs sorting ASAP.

sheramber said:

What are they fighting about? Money?

They implied this although we didn’t go into it at length, I was so blindsided by the request I kind of wanted to get off the phone to process it! Unfortunately we know historically they argue a lot and always have done but it seems to be escalating now (or they’ve hidden the true scale of it from us for a long time). If we ever travel to visit them we can’t stay with them at their house and instead need to book a local hotel for a couple of nights. Their house is pretty big, so I can only think they don’t want us staying there as we’d see the arguing. 

Grumpy_chap said:

Conversely, the sibling has lived beyond their means to have much that the OP has not yet enjoyed

Nor would I say that the father should advance make the gift to the sibling, but that is not the OP's decision.  Will the father also make a similarly large gift to the OP?

This is what set the ball of doubt rolling for me. Without wanting to sound ungrateful, living with my partners family for such a long period has at times put a lot of strain on our relationship and we’ve sacrificed a fair bit for this goal of buying a house. 

I actually called my dad again last night to express my concerns and they’ve offered to bail my sibling out for the full amount, but this worries me equally. My dad is retired, he’s not living on the poverty line but he’s not rolling in money either. I don’t want him to get into trouble over this but I guess ultimately that’s his decision. He said he’d do the same for me, but I don’t think I’d ever feel comfortable asking him for this much money. Everything I’ve planned is to prevent that - I don’t ever want to burden anyone financially in the future.

Sea_Shell said:

You seem to still be wavering about the loan?     Don't let them play emotional games with you.     The words you need are "No, sorry"    If your Dad wants to get involved, that's up to him.    If he's happy to gift to one child and not the other, again that's his decision.

If they both have a problem with you saying NO, that's THEIR problem not yours.

Stay strong, and good luck.

Thanks for this, writing it out and seeing some impartial opinions has been really helpful. I think I just wanted some moral backup as my dad was leaning towards lending the money. I think unfortunately he’s told my brother we’d split the amount between us (which I didn’t 100% agree to as I said I wanted to speak to my partner first) so there’s probably going to be a lot of upset when I tell them I don’t want to go ahead with this. 

If in doubt you could always blame your partner!!!   I'm only half-joking.    I know that's what my husband would say, if I'd been asked to lend my sibling money.    Although they might come to the (wrong) conclusion that you are in a controlling relationship.   But you really do have to BOTH be on board with any decision to lend (basically gift), otherwise you risk it de-stabilising your own relationship.

So your words could be "Sorry, I've discussed this with my partner, and they've said no.  I have to respect their wishes on this matter".

calleyw

boldaslove said:

Thanks for this, writing it out and seeing some impartial opinions has been really helpful. I think I just wanted some moral backup as my dad was leaning towards lending the money. I think unfortunately he’s told my brother we’d split the amount between us (which I didn’t 100% agree to as I said I wanted to speak to my partner first) so there’s probably going to be a lot of upset when I tell them I don’t want to go ahead with this. 

Not sure why you felt the need to drag your partner in to it. Even if was to deflect to give you time to make a decision.  Tough if its going to upset people not your problem.

All you needed to do was say "no" and say nothing further, if they try and press it say "I gave you my answer its no and its still no" and keep saying no.  its called the broke record techinque.

Other peoples finances are your not problem. Its obvious they have been living above there means and expect someone else to bail them out.  While you have been scrimping and saving to buy a house and had a awful year with jobs and health.  Sounds like some very selfish people you have in your family.

Stay strong and keep to your princples.  And the biggest thing don't feel gulity about it.  Why should you fund someone elses lifestyle when it obvious they have no repsect for your circumstances.  its like asking a homeless person to pay your bus/taxi fare home because you spent all you money drinking on a friday night out.

Yours

Calley