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lending some money to a close friend
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As others have said, while you shouldn't lend to friends/family even if you the two of you banged up some sort of agreement, any mortgage will require funds provided from a third party to be signed over on a gifted deposit form (where the party providing the funds signs to confirm that the monies are a gift without any expectation of reimbursement).
If you're talking about lending them a little bit of money, it shouldn't take them much longer to save it.
If you're talking about lending them a lot of money, then they probably should not get a mortgage yet.
At the moment, the thread below this is someone that's been scammed by a friend, every week we see a new thread from someone that has fallen out with a friend over money, please don't become one more on the pile.Know what you don't1 -
Your thread title said close friend, not family so you can understand the confusion there.
If you are prepared to make a gift of the money - and sign something to confirm that you don't want to be repaid then the mortgage provider will accept it. If it is a loan then that will affect their affordability calculations.I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
xyz111 said:secla said:Also a lot of mortgage company's wont accept gifts from anyone but close family membersYour thread title and opening post said "close friend"?Either way, if you want to help them out then your only option is to give the money as a gift - and the mortgage lender may require something that's signed to confirm it's a gift.
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Question: if your close friend/family member is paying a mortgage, how can they afford to pay you back on top of this sizeable monthly outgoing?
I'm paying a mortgage myself and would find it hard to put aside money for loan repayments every month when there are other things I'd like, such as new furniture for my lovely new house, a bigger TV, some fancy cookware for my new kitchen, bigger wardrobes and beds to fill my new bedrooms...you see where I am going with this?
As soon as they buy the new home they will want lots of shiny new things to put in it. I question whether they would have the self-discipline to pay you back X amount per month with all their other financial obligations."The problem with Internet quotes is that you can't always depend on their accuracy" - Abraham Lincoln, 18641 -
xyz111 said:secla said:Also a lot of mortgage company's wont accept gifts from anyone but close family members
There is NOTHING, and I mean NOTHING that you can write down, draw up, sign, video, blood pact on, NOTHING, that will protect your money.
If you loan this money and they are not 100% trustworthy, then there is the sum total of ZERO you can do to get that money back.
They're either a close friend or they're family. But neither commands any legal difference.
If you lend them this money, make sure you can afford to live your life without it. Because you may never, ever get it back.
I suspect you've actually already made your decision which is disappointing.
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Ryan_Holden said:I suspect you've actually already made your decision which is disappointing.
I think given their last pointed response and two pages of people all saying the same thing - that it's a bad idea (and probably not possible without lying on the gifted deposit declaration), there's not much more to add.
The OP will do as they choose, but they can probably expect short shrift should they come back complaining that their friend/family has not kept up with their repayment promise (which we see day in and day out, there's literally a thread a couple below this one where someone has been stitched up by their friend for over £10k).
Know what you don't1 -
If the person was due an inheritance (waiting for probate to complete / sale of expensive house to go through) then 'lending' them the money under a bridging arrangement would seem reasonable because there are safeguards you can have in place (although these aren't infallible).Getting security on the house won't work because you need to declare it and the mortgage lender would in vest case scenario want to out rank you.May you find your sister soon Helli.
Sleep well.1 -
Unless you can afford to lose it I suggest you do not do it. As you seem to be looking for some sort of certainty it will be repaid this suggests you cannot afford to lose it and if your family member hasn't saved it or cannot borrow it the chances are they are overstretching and perhaps should not buy yet.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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It is entirely up to you to lend the money. Be prepared to lose it though. I do not know how they will afford to pay their mortgage, amongst other costs and you, after all, you will be a debtor. If they are getting pressure from banks etc to make repayments, you will be at the bottom of the list and expect to hear sob stories and excuses about paying you back because you cannot impose any enforceable charges or penalties.
I have had family members trying to emotionally blackmail me into lending them money and the first thing I thought was how are they going me back if they are heavily in debt as it is, it is not as though their income has increase to afford to be in debt. I know I would hear 'we are family, you should not expect the money back, we are blood... blah blah blahh!'
An in-law lent several hundreds of pounds to their family member, they put on the waterworks, was ringing, texting and visiting everyday to keep my in-law sweet (before, they wanted the money, they were like Lord Lucan) got the money and then disappeared. The in-law is hoping to take out a CCJ, but I doubt that will be worth the paper it is written on.0
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