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.

OP long gone yo

Don’t do it OP!

No way should you consider lending money to her. She needs to stop being such an entitled, selfish, greedy princess and lower her expectations to buy a property she can afford without borrowing money she cannot afford to repay. You are not being at all unreasonable wanting to keep any savings to spend on your own immediate family and your home, and for your husband to keep the business afloat, if possible. She needs to learn to live within her means, and that should start with buying a property of an appropriate size and value - why should she live in a palace at your expense? If you had Euromillions-type of money maybe you would be in a better position to accommodate high-maintenance relatives, but otherwise a simple "we cannot afford to give you a loan" should be all you need to say - you do not have to justify your decision to her. Good luck

The American economy has been shut down for 6 months now. Millions of us are out of work. Trump gives his wealthy friends 1.6 million and the rest of us $1,200. Your economy could shut down too as the pandemic worsens. Your government will do the same to you. It's best to be frugal during this uncertain time.

Please don’t give her any money at all. She doesn’t need it. You do.

You will not get a penny back. Think how long it takes you to earn £5k. Are you willing to do that while she sits at the spa?

This will be a gift not a loan. I can’t stress enough that it’s a bad idea to give her anything

I have a CF SIL like yours. She tried to convince her DM (my MIL) to release equity on her home so SIL could buy a bigger property after her divorce. MIL's home was actually in both my DH's and SIL's names so SIL thought she'd just take her share early.

No thought for who would pay the equity company for fees, the fact that most equity release ends in financial shortfall and also what would happen if MIL needed to sell and buy another property etc, etc. It's all Me, Me, Me!

DH told her to take a hike and I think your DH should too, this will only end in tears.

I'm a firm believer in helping people (especially family) and this is a huge no for me. There is no reason she needs a 5 bed house, she won't be working, so many other reasons too. She needs to cut her cloth according to her coat.

She sounds entitled. Stand firm @mabelandivy

Lend her the money and you might as well change your username to Axminster.

Sil needs to cut her cloth according to what she can afford and what she needs. She only needs a two bedroom house so that's what she should be looking for, through social housing if necessary.

Let her get a mortgage cheeky madam! Please, please put your foot down and don’t let your husband do this as lending money or helping out with finances rarely works between families over vast sums of money. My SIL told my hubby he was going to be her Guarantor for her flat. Told him, didn’t ask, (he had helped her out in the past). I said no way! She didn’t like it but she got the message. She is not going to be able to give you the money back if anything happens and your first priority is to protect your finances, particularly, if you are worried about the job situation...

@Zyzxyz some people have got the cheek of Old Nick! I would be asking for the $60 back! Your ‘friend’ would soon shut up then!!

Are you on a wind up OP? You've certainly got all the elements that will get people RAGING: SIL wants a five bed house/ she's still living the high life/ your financial situation is precarious and you're working your fingers to the bone but you might still give her thousands. It's a perfect storm.

It’s quite straightforward. No, she has to buy a size of house according to what she can afford. If she couldn’t afford to buy a house that was suitable for them to live in then that would be different.

Absolutely no chance

Well done op for deciding to stand your ground. At this time you'd be very silly to be loaning savings, especially to friends and family. It's a recipe for disaster at the best of times

Eh? How is she 'standing her ground', she said she would agree to SIL being gifted up to £5k.

That's a lot of money when you've little chance of getting it back and only looks small when compared against the original £30k.

If she'd asked to 'borrow' £300 and the OP had said 'do you know what, you've been through a tough time, here's £5k so you can treat yourself' she'd look like a lunatic, so it makes no odds that the original request was for far more when it's not needed (if she's £50k short of a 5 bed, chances are that she can easily afford a 3 or 4 bed) and there's no chance of the OP being paid back unless quite substantial maintenance is paid, she gets a job or has a significant change in mindset about spending and money management, coming from a position of making offers on houses she cannot afford and expecting her brother to just waltz in and pic up the tab.

Give her 5000 and you'll be bitter for a long time. Every time you need to work extra or work harder or want something but you have to save for it , you'll remember that 5000. The chances of her paying it back are v. low. I mean to her 'its only 5000'. Easy to say when you haven't earned it. Give her fuxx all and tell your husband no need to feel guilty. Put YOUR family first.

Fair under the circumstances? How, exactly? Your husband is letting staff go, the business is on shaky ground, and you're working extra hours. And still you want to give 5k to someone who is out on spa days and eating out. She's playing you. Don't let her.

Some people are really unbelievable. Tell her to jog on.

you could make it a proper investment. the house could be put up similar to a mortgage and a rate of payments and interest agreed upon.
if she defaults you have a house to rent or sell or hold for investment.
How much are you getting at the bank at the moment for your savings?
of course if she paid too much for the house or has a huge first mortgage it might be too risky to take on a second mortgage position.
Maybe, she intends to rent out as its so big and earn an income.
Should it be that you want to help and she really needs it, why not if you do it right.

I often find these things are solved by offering the cash...for a proportionate share on the house, with a legal agreement drawn up at their expense. Usually these things are enough to put people off.

@riceuten

I often find these things are solved by offering the cash...for a proportionate share on the house, with a legal agreement drawn up at their expense. Usually these things are enough to put people off.

You often find - seriously how many CFers are there who'd ask for money for their house.

Nope refuse. I've lent money to family and never got it back as there's always some excuse then it's too long ago they forget they didn't pay you. What would you do if heavens forbid your DH business got into big trouble, no way would she pay you back immediately. She needs to buy within her means if something else went wrong you'd never see that money again. No reason needed for Refusal just a no.

UANBU - Ask DH to sit her down and ask how will she pay council tax fees, heating, emergency repairs etc for such a big house when she is not working.
Jobs are also even harder to come by with the pandemic. He will need to be honest & tell her the business is at risk of losing staff or even closing down all together, which means you will need at least 6 months to a years worth of money to cover your own bills and expenses if you have to close your business.

I would sit down with your husband and cost out repairs that need doing in your own house, put that money aside, work out yourself how much you will need a year if the business closed (worst case scenario) and put that money aside too as a back up. Think about your pension too.

Then you will know exactly, how much you can actually afford to loan out.

Get SIL to also work out what she can actually afford, to repay, if she is on benefits. Depending on age of child she will also need to consider child care costs if she intends to look for a job.

If you do loan anything, make sure you have a contract of how, when and how much, will be paid back in writing. Also, what will happen if she starts missing payments??

Even with agencies, the work is minimal this year with another possible lock down on the way, she will probably struggle to find a job & even maintain a small house, if she is not working.

Divorce lawyer fees will also need to be taken into account, as well as other fees when buying a house.

I'm all for helping out family, but SIL needs to be realistic and live within her means.