Asking for a substantial amount of money

[mabelandivy]

SIL is going through a divorce, their house has just sold and she's put an offer on a new one. Problem is the divorce settlement she is getting, share of sell of house money doesn't cover the new property with a shortfall of almost £50k. DH has been asked whether we can help out and she's requesting a loan of 30k from us. DH went back and said that was too much due to our financial situation currently and the next request was £25k. AIBU to think this is a huge amount of money to be asking for? We do have savings that would help, but we've have put off doing things around the house due to cash flow and DH's company being in a difficult position currently due to Covid - he is making lots of redundancies and we're not sure if the business is going to survive. The house the offer has been made on is lovely, but is huge - 5 bedrooms when it's just SIL and DS - and there are other nice (smaller) properties on the market in the same area for considerably less. I am happy to help, but I think a 6 figure sum request is a lot of money and also a cheeky big ask. I should also say that I can't see how this money will be paid back when SIL also doesn't work.

I think borrowing or lending within families or friendships is a recipe for disaster.
I’d explain kindly that you can’t afford to lend any money at this time and signpost her to the bank or an estate agent with cheaper houses.

Not a chance. A simple, "sorry, but we are not in the position to provide a loan at the moment" will suffice. I wouldn't be loaning anything when she could have bought an affordable place and has no way to pay the loan back.

Absolutely YANBU what is the justification for a 5 bedroom home she can't afford? What is her plan to pay you back - why doesn't she work? It sounds like a disaster and I'd be steering clear especially when your own situation is precarious at the moment.

Absolutely no way in hell would I give her that money. If it was the difference between a family member being homeless or housed that would be one thing, but the difference between a 5 bed and, say, a 3 bed house? No chance.

Quite apart from lending money to friends and family often being a REALLY bad idea, and your own current financial uncertainty...

A 5 bedroom house for 2? She is taking the fucking piss!!!

Unless I had a lottery win, there is no way I would even consider it.

SIL needs to live within her means and buy a cheaper house.

Why does she need a 5 bed house that she has to borrow so much money for? A maximum of 3 bed would suffice surely? I think she is being incredibly cheeky unless there is a backstory. Whatever you do, make it official. No way I would loan that amount to family member to buy things they obviously can’t afford.

Are you actually wondering if you’re being unreasonable or did you just want to vent?

2 different issues- 1) no you aren't in a position to provide a loan and 2)why can't sil get a job and a mortgage? And a smaller house?
Or just buy a smaller house outright?

You not lending her eleventy billion pounds will not result in them being destitute - they have options. So your consciences should be clear.

Do you think she would downsize and give you money if you needed it?

100% no. She needs to adjust her expectations straight away that her situation has changed and her purchase and decisions going forward have to reflect that.

Tell her very clearly you simply aren’t in a position to help. Up to you whether you add that she’s a CF and heading towards a lot of debt she can’t service.

No way! Do not lend any money that you can't afford to give away. You will never get it back.

Obviously I can only go on what you've shared, but someone who feels they need a 5 bed house for 2 people sounds very entitled, and as if she wants to maintain a certain standard of living. I would hazard a guess you would be hit by sob stories when you asked for repayments and possibly more requests.

Nip this one in the bud now. She needs to learn to live within her new means. A 2 bed house for 2 people is perfectly adequate and sounds like it is easily in her price bracket.

I think it's cheeky of her to ask but as you haven't told her no, she's going to keep coming back and asking for smaller amounts, hoping she finds one you'll say yes to.

Tell her you can't lend her any money. You don't have to explain your financial situation but it may help if you just say it's due to the current climate.

She can’t pay it back so unless you were properly minted and in the habit of making large financial gifts to people that would be mad.

With the business under threat she’s being staggeringly rude even asking.

“No, we can’t help”. That’s all DH has to say.

If it’s a 5 bed house, then whatever the location, the £50K she’s short can’t be more than 20% of the value. If she hasn’t got enough income to raise a mortgage of £50K on an 80% deposit, I’m curious as to how she has enough income to (a) pay you back and (b) run such a large house.

Why isn't she getting a mortgage? That's what pretty much everyone else does when they buy a property!

@upsidedownwavylegs

Are you actually wondering if you’re being unreasonable or did you just want to vent?

If you do agree to loan the money I'd get a contract to ensure you own the relevant percentage of the property until the loan is paid off. If she's cheeky enough to ask for it, she's cheeky enough not to pay you back.

Is DH even considering this ridiculous request? She doesn’t need a 5 bed.

Assume this will be a joint decision as it’s family money?

She could get a bank loan or small mortgage using the equity in the house, it's a definite no from me

I would ask if she’d lost the plot and not make any excuses. With just one child, a 2-3 bed house sounds perfectly doable and adequate.

Don’t do it- 5 bed is completely unnecessary and you don’t know where your jobs will be at!

If she was struggling to afford a 1 bedroom flat in a dodgy part of town snd couldn't work because of disabilities absolutely

But she wants a 5 bedroom for 2 snd (I presume) doesn't want to work. She can't afford it. Absolutely not. Especially with covid and your husbands work situation, as well as you putting off things to do.
Maybe 5k as a gesture of good will!

She sounds a bit spoilt, why on earth would she be wanting a 5 bedroom house for 2 people otherwise?

She's going to have to take back the offer and find something else. You'll never see that money again if you give it to her. More fool you if you do.

She needs to cut her cloth accordingly. How ridiculous and embarrassing that she even asked you.

Ah hang on! Is she planning to take in lodgers to pay for the shortfall she is about to face? If yes, and if she is unable to get a good and stable job otherwise, this may be a good plan of her. In this case, I would probably make it a joint venture and make it legal. It depends on how your relationship is with her and how much trust you have in her. Either way, at least your investment will be safe and she will have a house to support her forever (assuming she always takes on lodgers and doesn’t marry again).