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  • FIRST POST
    • Flip1234
    • By Flip1234 17th May 19, 12:02 AM
    • 6Posts
    • 0Thanks
    Flip1234
    Family loan
    • #1
    • 17th May 19, 12:02 AM
    Family loan 17th May 19 at 12:02 AM
    Hi apologies if I'm posting in the wrong area. In 2012 my wife and I bought a property. My FIL leant us 35000 towards the cost. We had an agreement that within 10 years we would repay him 1/5 of the properties value. 10 years went by and he wrote the debt off. We are now getting a divorce and ex has said that FIL now wants his money back. Is he able to do this?
Page 2
    • Kentish Dave
    • By Kentish Dave 19th May 19, 9:51 AM
    • 228 Posts
    • 349 Thanks
    Kentish Dave
    OP you signed a contract and if I had been in your FILs place and given my daughter a substantial deposit with written confirmation of the arrangements I would want it enforced should her and my son in law split. The legal costs will be high so you are better off coming to some arrangement and pay what you promised to pay.
    Originally posted by enthusiasticsaver
    I disagree. You cannot forgive a debt then change your mind six years later.

    Once the debt was gone it canít be resurrected.
    • enthusiasticsaver
    • By enthusiasticsaver 19th May 19, 11:43 AM
    • 8,526 Posts
    • 19,792 Thanks
    enthusiasticsaver
    I disagree. You cannot forgive a debt then change your mind six years later.

    Once the debt was gone it canít be resurrected.
    Originally posted by Kentish Dave
    No documentation to say the debt was written off. Whichever way you look at it the area is grey. Chances are if this loan, gift or whatever was lent or given towards the deposit then the mortgage lender was presumably unaware of this. In 2002 they were no where near as careful about origins of deposits though so maybe it was not queried. Morally I think it is difficult though if the parents of one partner in a marriage give an unequal amount of help at the time of buying then that relationship disintegrates I think it is highly likely most of us would not feel inclined to let the gift stand to the other party of the gift.

    Legally though the FIL has a contract to say he lent the money and it was not repaid as promised in 2012. There is also the non documented writing off of the debt according to the OP. Now the relationship has broken down the OP knows full well the gift was given in good faith to both him and his ex on the assumption their marriage was for life. If it goes to court it will be expensive for both parties and presumably the OP wants to move on with his life. He should do the decent thing, accept the gift was given to his ex and not him and take his share of the equity and move on after repaying his half of the gift to his FIL.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • enthusiasticsaver
    • By enthusiasticsaver 19th May 19, 11:46 AM
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    enthusiasticsaver
    Where I do think the OP has a point though is that the FIL should not necessarily get the 20% value of the property at todays prices but in 2012 prices when the loan should have been repaid. This may be a somewhat middle ground if the two parties want to see an end to the arrangement.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Kat78MFW
    • By Kat78MFW 19th May 19, 12:00 PM
    • 88 Posts
    • 139 Thanks
    Kat78MFW
    We bought in 2002 using a loaned deposit from BIL and SIL. They loaned us 10 000 towards a 124000 purchase. We were never asked by the mortgage provider or the solicitor about the source of the deposit. I don't think loaned deposits were an issue at all in 2002. There was only minimal assessment of affordability as well. Very different times.

    I totally understand the FIL point of view on this - I think as long as you come out of this with some equity as a deposit for a new place, you'll have done alright. If FIL hadn't loaned the money, you might have had to rent for years and wasted 1000s in rent. Also by getting on the ladder in 2002, you have benefited rather than suffered from the rise in house prices.
    Current mortgage (March 19) £54 943 (5yr fix since Jan 18 Interest Only 1.99%)
    Current monthly payment £799 (£109 interest and £690 repayment)
    Current Mortgage Free Date March 2025
    Opening mortgage balance June 2002 - £114 000
    Re-mortgage May 2007 £118 000 (borrowed extra £14 000 to pay loan back to BIL+SIL)
    Agreed repayment date May 2027
    • DoctorStrange
    • By DoctorStrange 19th May 19, 1:51 PM
    • 45 Posts
    • 12 Thanks
    DoctorStrange
    All very messy, and in such cases what's legally acceptable is not always what's morally correct.

    If I was in that situation, I'd think that the FIL helped me out when I needed it and his act of kindness should not come back to haunt him.

    As such, I'd say that the ownership of the house is split 40/40/20. Assuming the FIL is acting to protect his daughters interests, I'd offer a 60/40 split in her favour.

    As others have said, you benefited from the leverage his monies provided, as well as lower mortgage payments over the years. So, whilst you may feel his "gift" is now being retracted (and that's not without merit) when you weigh up the costs of fighting this, both financial and mental, I'm not sure it'd be worth it.

    Good luck to you all, whatever you choose to do.
    • Flip1234
    • By Flip1234 12th Jun 19, 1:23 AM
    • 6 Posts
    • 0 Thanks
    Flip1234
    Hi. Yes he wants 1/5 of value of property back. I got into my situation through gambling. Got myself into lots of debt. I'm paying the debts off through loans. Living back with my parent. I would happily let him have his money back but I will then not be able to put a deposit down on another property. To be able to spend time with my children in my own place is what I am trying to achieve.
    • Flip1234
    • By Flip1234 12th Jun 19, 2:17 AM
    • 6 Posts
    • 0 Thanks
    Flip1234
    Hi this was our second home. The in laws were working and living abroad at the time. There house was let out. We gained an extra bedroom which they would use when they were coming back for holidays visits etc.
    • dogshome
    • By dogshome 13th Jun 19, 8:22 AM
    • 3,217 Posts
    • 1,674 Thanks
    dogshome
    Situation not quite one of parent helping kids on the property ladder


    Dad is a sharp cookie in in fixing the loan value to the house value over 10 years - It's a rock solid investment with a very, very good return.
    Loan £35K - Present house value £315K - Loan payback £63k


    The problem is that in how in blazes did Dad think the loan would be re-paid?
    For a normal family, to find £63K they would have to sell the house and buy another for only £252K - This ? adds credence to the unwritten agreement that the loan was written off.


    However, the OP's 1st post says " lent us"
    If the house ownership is in joint names, both the daughter and husband are jointly liable for the debt, so the OP's share is £31,500, not £65,000.
    • foxy-stoat
    • By foxy-stoat 13th Jun 19, 8:45 AM
    • 4,364 Posts
    • 2,558 Thanks
    foxy-stoat
    Dad is a sharp cookie in in fixing the loan value to the house value over 10 years
    Originally posted by dogshome
    Only if he added a charge to the property years ago - if not then it will all be down to trust and what is morally correct.
    • Gaz83
    • By Gaz83 13th Jun 19, 11:00 AM
    • 3,767 Posts
    • 7,046 Thanks
    Gaz83
    However, the OP's 1st post says " lent us"
    If the house ownership is in joint names, both the daughter and husband are jointly liable for the debt, so the OP's share is £31,500, not £65,000.
    Originally posted by dogshome
    Nope.

    Not unless the original loan agreement specified a loan of £17.5k to one and £17.5k to the other.

    If it was a joint loan, then both parties are jointly and severally liable for it. The lender is well within their rights to attempt to get the money from whoever they think it will be easier to get it from.
    "Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."
    • Exodi
    • By Exodi 13th Jun 19, 1:48 PM
    • 736 Posts
    • 967 Thanks
    Exodi
    Brutal, my partner's dad gifted my partner a sizeable deposit. I deliberately had a declaration of trust drew up to protect this in any case.

    The thought of being joint tenants, breaking up, and trying to pocket her dad's money.

    I wish you the best of luck OP but I certainly couldn't do what you're considering...
    Know what you don't
    • dogshome
    • By dogshome 14th Jun 19, 6:32 AM
    • 3,217 Posts
    • 1,674 Thanks
    dogshome
    I still believe that both the wife and departing husband are jointly liable for the debt.


    The OP says that the wife wants to stay in the house and buy out his share, and I suspect that it is Dad who's come up with the plan of resurrecting the loan at it's present value and laying it all on the shoulders of the husband, to reduce the buy-out sum.
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