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.

Why is she looking at houses that she can't afford?

Super cheeky, but it is 5 figures not 6. I'd still be saying no way.

"Happy to help" are you? I suggest you help get by telling her to look for a property she can actually afford. Point out that the purchase price is only the tip of the iceberg. Big houses cost a lot to heat, maintain and repair. She hasn't given that a thought either.

Tell the scrounging so-and-so to get a job. If she wants nice stuff she can earn the money to pay for it!

It definitely sounds like it's not a risk you can take if your business might not survive and you're making employees redundant. Get real!

She's asking family because there's not a snowball's chance in hell that a bank would approve her for a loan. Your SIL has a lot of nerve asking for 25,000 down from 30,000-very little difference in total.

Just say no...
That is a stupid request, she has no right to ask you.

It's a big fat no from me.

It sounds like she's going to learn the harsh financial realities of life pretty soon. Please don't let it be after she's squandered your nest egg, which you may need yourselves at some point.

And don't let your DH be pressured into helping...

@bridgetreilly

Super cheeky, but it is 5 figures not 6. I'd still be saying no way.

Yes, I wondered where the “6 figure sum” had come from - unless she actually asked for £300,000 and not £30,000.

Either way, she needs to buy a property she can afford - that’s what the rest of us have to do!

Astounding.
Why does one person with one child need 5 bedrooms?

Absurd and greedy .... Coming to you with begging bowl is ridiculous..You'll never get it back.

If she can't afford it, she'll have to buy something smaller and cheaper.

The only way I would consider it is if you had a charge on the house so were guaranteed any uplift in equity when it's sold. Which I presume it will be when she discovers it's too big and costs too much to live in!

Is she planning to rent the other 3 bedrooms our for extra income? Or how is she planning to finance her life? She's not asking for a loan if she has no plans to find income to pay it back.

‘Never a lender or borrower be’. Especially if family or friends.

She needs to realise that divorce is going to change her financial situation, and do this pretty soon.

Even if you had the money it would just delay an inevitable crisis when she discovered that she can't afford to run the house, shop as much as she likes to or take as many holidays as she is used to. Cheeky indeed.

The only way I would consider this is with a legal document giving me, and my beneficiaries an appropriate percentage in the house. If it costs £300k and you lend her £30k, then 10% of that house is yours, and 10% of whatever the sake price is is yours .... but I wouldn’t do this unless I was 100% sure I didn’t need the money quickly ....

She doesn't need a 5 bedroom house. That's ridiculous, she needs to learn to live within her means. I would advise her to look at 2 bedroom properties instead. Remember anything you lend, you may never ever get back.

How will she be able to afford the mortgage if she doesn’t work? Let alone pay you back?
I wouldn’t give her a penny as you’d probably never see it again!

Without a repayment plan it would be a no from me. Is she considering this as a gift?

Even if she does intend to return you the money people massively underestimate how hard it is to save money to return to lenders. In the meantime inflation will have devalued it. Even if you were to lend 10,000 you can imagine that she would have borrowed another 5k-10k from another DS or SIL or BIL or friend and it would again take ages if at all to return it.

And no, you don't have to give her a penny as a "gesture of good will". More like "wouldn't a 2 bed property have sufficed?!". I have seen 3 generations living in 1 beds for years to save money for a house they can afford.

I would be telling her to put it on her list to Santa...
What a cf!!

Good heavens absolutely not , not a chance in hell would I loan that kind of money out .
Why does she need a 5 bed house ?
How will she afford to run it ?
Will she sell un immediate to free the money to give back to you if your DHs business goes under .

It would be a very flat no from me but if you find that hard to say , go through what you estimate the following bills would be -
her income is xxx
the council tax is xxx
the gas is xxx
the electric is xxx
tv licences , xxx
then the things she already uses like netficks , amazon , mobile phone , broadband school fees after school clubs etc .
Add emergency fund payments for replacing broken stuff or she will want to defer payments because the washer is broke , spilt red wine on the carpet etc
Once every single bill is accounted for add on the repayment plan you would like her to follow to pay back the loan and interest making sure that the loan is not going to run for a ridicules amount of years and see what the outcome is. ( Not forgetting to add estimated inflation % )
Then approach her and say we have done the number crunching and you can not afford it . Do not sugar coat it , you need to be blunt or she will come up with 'I will find the money from somewhere , I will get a job , DCs dad will help me pay for it' etc

I would also be very wary of her saying well if you can not lone me 25k can you loan me 20 k then reducing it to 18k then 15k - 12k etc until she either wears you down or it starts to sound feasible, She is still very unlikely to be able to pay of 12k with no income .

No way

if you want to help family - & they need it (query as to whether she does) - you should only give what you can afford rather than loan - which means a much lower figure.
I am not suggesting you should

No no no
Don’t buy what you can’t afford

Who the fuck has voted YABU??!!!

It’s a five figure sum, not six.

My sister asked for something similar when her marriage ended although the sum involved was even larger. Realistically we would have been giving her the money. She could only ever have repaid it by selling the house. We had the money but that wasn’t what we wanted to do with it. It was and is intended to help out our D.C. with house purchases not an adult sibling.

We didn’t go into any of that detail with DS. The answer was a very straightforward and honest ‘Sorry, we don’t have that sort of money to lend‘ and that was the end of it. She took it very well and said she had only asked because her divorce lawyer had suggested it. She went ahead and bought the house anyway. I have no idea where she found the cash we wouldn’t lend but she managed just fine without it.