How to loan money to partner
Advice needed:
My partner is paying about £100 in interest on approx £5000 of debt a month. I have the money to loan him to clear off that debt and instead he can pay me back monthly. It makes sense rather than loosing the interest! We would make a written arrangement, even though I have no doubt at all that he would always pay me back.
I was wondering though does anyone know how a mortgage lender would view this? Would they want to see the agreement to know I have that much money owed back to me? Or would they count that as not guaranteed? I am planning on being a first time buyer at some point whilst he would be paying me back.
Thanks for any help.
My partner is paying about £100 in interest on approx £5000 of debt a month. I have the money to loan him to clear off that debt and instead he can pay me back monthly. It makes sense rather than loosing the interest! We would make a written arrangement, even though I have no doubt at all that he would always pay me back.
I was wondering though does anyone know how a mortgage lender would view this? Would they want to see the agreement to know I have that much money owed back to me? Or would they count that as not guaranteed? I am planning on being a first time buyer at some point whilst he would be paying me back.
Thanks for any help.
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Just don't. Your partner needs to fix their own situation, perhaps by applying for a 0% credit card or suchlike. You are not financially responsible for them and even if they sign a piece of paper, if you break up you will struggle to get the money back.
LB moment - March 2006. DFD - 1 June 2012!!! DEBT FREE!
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Yes we've had lots of love and laughter over the last 30 years. No, we never got our mortgage. In hindsight I should have remained financially independent but I knew no different. I copied what my parents did and thought that being joint in everything was the only way. Sure, buy him the odd drink, lend him the odd tenner, help him sell unwanted items and make sensible shopping choices, but unless you are willing to give the money away and spend the rest of your life subsidizing him then look after your own money and keep your mortgage deposit in tact.
The interest on a £5000 loan over two years at 8% APR is about £30 per month. Over a longer period it will be less.
He can borrow £5000 from Tesco over 2 years at 3.4% and will pay £7 in interest per month.
Pay day loans perhaps, unapproved overdraft that sort of thing
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Keep that 5k for your deposit when you become a FTB.
Help your partner by assisting with some suggestions, can they over pay, are they able to get a 0% CC with a money transfer option to pay off the loan?
Help them by cutting down on nights out and fancy things in life together.
Establishing a good line on this now will do your relationship good for the future.