Family loan

elduderino2

I want to loan £40000 to my brother to help him purchase a property.
It would be short term , months not years.
I realise it needs to be done legally.
Is it just a case of using a solicitor?
Do I need my own, or can I use my brothers.
Would appreciate any comments from people who have been in this situation?
The only interest I would charge would be what i would loose from the interest I would have gained from the savings account it came from.
how would I go about working this out?


Regards

Flugelhorn

Is your brother looking at getting a mortgage? if so a loan from family can be a problem - owing to charges on the property / affordability etc 

Retired_Minky

I’d recommend you get a family assist mortgage. The bank will take care of it all for you and they’ll route you your payments with interest. 

Flugelhorn

Retired_Minky said:

I’d recommend you get a family assist mortgage. The bank will take care of it all for you and they’ll route you your payments with interest. 

sounds ike a good move but presume some of this is for a deposit ?? 

elduderino2

Thanks for the very prompt replies 👍
there is no mortgage requirement.
without going into the personal details, my brother would be able to repay me back within a few months.

Wonka_2

And have you considered what happens if he doesn't/can't i.e. his circumstances change ?

The forums are awash with people who've lent in good faith and return some time later wanting to know how they can get their money back (and invariably they can't)

The way of doing yours is likely to include solicitors and you taking a share of the property which he then buys back from your when funds allow. Depending on your circumstances this may then incur additional costs for you having a 2nd property etc

MEM62

elduderino2 said:

I want to loan £40000 to my brother to help him purchase a property.

Oh dear......    :-(

elduderino2 said:

It would be short term , months not years.

Well that's the plan now anyway.  

elduderino2 said:

I realise it needs to be done legally.
Is it just a case of using a solicitor?

It does not necessarily need a legal agreement and, even if you had one, it will offer limited protection if your brother is unable to repay you. 

elduderino2 said:

Do I need my own, or can I use my brothers.

Your brother's lawyer will protect his interests.  If you use him who will protect yours?    

elduderino2 said:

Would appreciate any comments from people who have been in this situation?

There are numerous posts on these forums on the subject of lending money to friends and family.  A lot do not end well.  Family and money are not a good mix.    

The general consensus of opinion (and perhaps common sense also) is that lending to family is best avoided.    

elduderino2

MEM62 said:

elduderino2 said:

I want to loan £40000 to my brother to help him purchase a property.

Oh dear......    :-(

elduderino2 said:

It would be short term , months not years.

Well that's the plan now anyway.  

elduderino2 said:

I realise it needs to be done legally.
Is it just a case of using a solicitor?

It does not necessarily need a legal agreement and, even if you had one, it will offer limited protection if your brother is unable to repay you. 

elduderino2 said:

Do I need my own, or can I use my brothers.

Your brother's lawyer will protect his interests.  If you use him who will protect yours?    

elduderino2 said:

Would appreciate any comments from people who have been in this situation?

There are numerous posts on these forums on the subject of lending money to friends and family.  A lot do not end well.  Family and money are not a good mix.    

The general consensus of opinion (and perhaps common sense also) is that lending to family is best avoided.    

This reply is one of the reasons I posted in the first place. 

I want replies warts & all.

mr_stripey

if he can pay you back in a matter of months, then maybe better to wait until then when he doesn't need your loan?

Borrowing from friends and families is very often the "last resort" option for people who cannot access credit/loans themselves. And for that reason it is very risky to be the lender in this situation. if they fail to pay you back there's not much you can do about it. 

Keep_pedalling

To protect your loan you should place a charge on the property. 

retiredbanker1

Why can he not apply for a loan (mortgage) in his own name even short term?