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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To feel worried about lending money?

113 replies

redwiner · 09/08/2010 12:56

I have a very close friend whome I know and trust well, I said I would lend them the money for a deposit to buy a house, as, like many people today they cannot raise the money themselves. However they have just told me that they may be losing their job soon, and whilst they may well get another one straight away-they also may not in the current employment climate.
My dilema is do I go ahead with my promise and lend them the money (about £15,000) and take the chance that if they don't get another job soon I may lose it if they get repossesed, or do I devastate my friend and say I am not going to lend it to them now-knowing full well that without my help they will lose the house and all the fees etc they have already paid out?
I am really having sleepless nights over this. The original plan was that about 6 months after moving in they were going to take out a loan to repay me.

OP posts:
pranma · 09/08/2010 13:48

Are you sure they still expect you to lend the money?Why not say that you will only do it if they are honest with their mortgage provider about the situation.An alternative would be to insist that you lend it legally with a solicitor involved so you have a claim if things go wrong.
Me?I'd have to go ahead because I wouldn't be able to deliver anothe kick in the teeth on top of the job situation but my head says 'don't do it' though my heart would have to loan the money.Sorry-no help I know.

AbiAbi · 09/08/2010 13:50

DO NOT LEND THEM THE MONEY!

I work in the insolvency industry, and so many people dig themselves deeper into trouble by borriwng from friends and family, don't do it Sad

LucyLouLou · 09/08/2010 13:51

I think you need to tell a white lie to get out of this (and you must get out of this). I would be saying the same thing whether your friend's job was at risk or not. Relationships and lending money do not go well together. Tbh, your friend should be being realistic about this anyway, she shouldn't be taking the money from you in the precarious situation.

Say you might lose your job soon and at the moment, making a financial commitment to someone else is going to leave you fucked if you become unemployed. There's no need to say that you don't think she will be able to honour her side of the agreement, you need to let her down gently. Yes, it will be disappointing, but it's totally necessary. It seems from what you've said that they are not really in a position to be affording the house anyway, let alone in the event of unemployment, so they should not be looking to buy when they can only afford to rent. They are simply not in a position to take on a long term agreement like this right now.

And yes, you really shouldn't have offered in the first place, however well intentioned your promise was.

Good luck.

minibmw2010 · 09/08/2010 13:53

I understand why they want to get the purchase finished/dealt with before any redundancy, as usually even one salary is enough to pay the mortgage (just not to qualify for it). BUT, if they can't afford to go ahead with the purchase without your money, then they shouldn't be doing it at all (sorry).

I think, personally, that you should only ever consider lending a person money if you can (worst case scenario) afford to write it off and expect never to see it again. Obviously if they paid you, that's great, but expect that not to happen.

JaxTellersOldLady · 09/08/2010 13:54

the reason that you cant 'lend' money for a deposit is that the mortgage company expect you to be able to put up the deposit/have it already in the bank, it isnt allowed to be borrowed money.

Please dont do this OP, it is a disaster waiting to happen. I know, from bitter experience.

theyoungvisiter · 09/08/2010 13:55

This is an aside but what do they mean when they say their job is at risk? Because you usually have to state on a mortgage application that you do NOT believe your job to be at risk - so I would be concerned that they are lying to the bank.

AMumInScotland · 09/08/2010 13:55

If they have just told you about the risk to their job, then this is the perfect time to tell them that you're going to have to reconsider. I think to an extent they must realise that you're going to have to pull out. Maybe they've even told you about the job thing because they know this makes a big difference, and are quite ready to hear you say what has to be said.

They might even be half wishing you would pull out, forcing them to give up on the house because they know deep down that it's a bad idea.

theyoungvisiter · 09/08/2010 13:57

I agree with everyone else btw - only ever lend money that you are prepared/able to lose.

It's simply not worth the fallout if you lend a sum that you can't afford to lose.

GeekOfTheWeek · 09/08/2010 13:57

I wouldn't do it.

I also think it is bad form of your friend to contemplate taking this money.

LimaCharlie · 09/08/2010 13:58

Unless you can get a water tight guarantee that you get your money back - and lets face it you won't as the mortgage company will have first charge on the house - then DO NOT LEND THIS MONEY

Like others have said you are actually doing them no favour in the long run if you are enabling them to bite off more than they can chew - whether they see this like that or not is a different matter.

Please listen to what eveyrone else has said - if you feel you need to justify why you cannot lend the money, but don't want to say its because they cannot pay it back, then say your job is at risk /you've had an unexpected tax bill / something is wrong with your house that needs the funds etc

Really if she falls out with you over this then she wasnt a true friend

StormyWeather · 09/08/2010 14:11

I pretty much agree with all that's been said. Just don't do it! However, I think it's strange that your friend still wants to take your money when she knows she's possibly going to be financially embarrassed in the near future.

SlobbyBOB · 09/08/2010 14:15

I think Redwiner has got the message guys.
Wink.

xkaylax · 09/08/2010 14:17

Dont be silly and do this....Shock

P.S

I dont know anyone who would lend a friend £15k thats crazy

Original poster
redwiner · 09/08/2010 14:30

They have paid out several hundred in admin fees, searches and solicitors fees,so not the end of the world but as with a lot of people whilst working and paying rent, its so hard to still live and also saave up enough for the deposit, whilst at the same time still managing to live-even frugally-especially as a singleton as they don't have a partners wages to help out. I really thought I was doing the right thing in offering to help but now it looks as though I've made a huge mistake.
Thanks everyone for your input, I do know what I have to do-probably did before I wrote anything down-but I just needed a second opinion in case I was being selfish in putting myself first when I already have my house paid off.

OP posts:
honie · 09/08/2010 14:37

What if down the line you had to mortgage to cover the money if it's lost?

Could you offer to help cover fee's, to soften the blow?

Best of luck!

Original poster
redwiner · 09/08/2010 14:42

Regarding the job, we both work in the public sector and have felt that our jobs were secure (mine more than theirs as they are more senior than me so its often the managers who go first) and its only been in the last week or so that they have been told the post is not viable any more. They have also been told that 'every effort' will be made to find them another job at the same/similar level but we all know that that may not mean anything. They have never been unemployed before so its not as if they are unreliable-they are prety senior level. the problem is is they are found another job inthe next few weeks it'll be fine, but if not they are expected to complete on the house in the next 2 weeks!

OP posts:
GeekOfTheWeek · 09/08/2010 14:46

Have they exchanged contracts on the house?

Original poster
redwiner · 09/08/2010 14:48

I think they did last week, its a brand new house so a moving in date not exact yet but some time in next couple of weeks-soon as its ready.

OP posts:
LIZS · 09/08/2010 14:51

Doubtful if you're putting up the deposit. I'd have thought the solictor would have wanted it transferred first and presumably you need to have it on standby. You need to find out really, if you want to stop your end of the deal before things have gone too far.

Original poster
redwiner · 09/08/2010 14:52

Actually, if they have exchanged then I think I will have to carry on as otherwise they will be totally stuck won't they? I suppose its a lesson not to promise something unless you can carry it through. I'm not rich but said I'd lend it to a friend in all good faith-maybe they could take a lodger in if they don't get a job right away to at least cover the bills?

OP posts:
GeekOfTheWeek · 09/08/2010 14:57
Shock

If you really have to lend this money then you need a solicitor to draw up an agreement before you transfer it. DO NOT do it without this, it is far far too easy for them to fob you off and not pay.

No money was involved when we exchanged contracts it is on the day of completion that all the monies are transferred.

You need to act NOW op Shock

LadyintheRadiator · 09/08/2010 15:01

This reply has been deleted

Message withdrawn at poster's request.

Chandon · 09/08/2010 15:06

do not do it.

They are bad friends for accepting your (kind but overly generous( offer.

If the banks won`t lend them more money, it is for a reason. Not because they are mean, but ebcause they have doen the maths and figured out that this couple will simply not be able to pay it back.

Get out of it now.

Youll have to choose between feeling guilty or feeling stupid (when they will not pay back, as they will NOT, as they will not be able to get that loan in 6 months time, and then what? theyll start resenting you, and it will eb end of the friendship anyway, AND you just will not get the money back.

sorry, but you just weren`t thinking when you offered

tell them you need the money for something else (even if just a savings account

minibmw2010 · 09/08/2010 15:10

No, you absolutely DO NOT have to carry on ... if you feel you must get to a solicitor now and have an agreement legally drawn up to protect yourself.

Frankly if you go ahead and lend/give them this money without any legal protection, you almost deserve never to see it again !!

MumNWLondon · 09/08/2010 15:15

I would not do this, unless you can afford to loose the money. What if they can't get a loan to pay you back? etc

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