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.

Your SIL needs to buy what she can afford, not just what she wants!

Intrigued as to how a non working parent can get a mortgage.

We have lent to two sons, one has paid back most of it, the other will as his circumstances change. We have written both off as a gift in our own minds and it is a lot of money. So if you cannot gift it then do not lend it would be my advice.

Out of interest, what sort of lifestyle did she have pre divorce?

Did she live in a large house then? Was the house expensively furnished? Was her exH a high earner? How long was she married? Are her parents well off? Has she given up a well paid career to be a SAHP?

I'm just wondering where the expectation for two people to live in a 5 bed house when she doesn't have the means to do so comes from.

Another NO here. She needs to lower her ideas and buy a smaller more suitable house. She can't buy what she can't afford.

If she doesn't pay the money back it will cause huge resentment. If she falls out with you over not lending the money then that shows you her true colours.

She needs to learn that she can only live a lifestyle that she can afford, starting with the house.

1. You do not have monies to lend to anyone.
2. Lending to family/friends is in effect a gift, unless

1. You have a ‘contract’ that can be referred to or enforced, e.g. written IOU for small sums or legally drawn up contract that stands as a charge on the property.

In brief, just say ‘No, we will not lend you monies, end of subject’.

It's fine for SIL to ask for money and equally fine for DH to say no and let her solve her own problems.

If SIL was actually struggling I would consider helping her financially but this is absolutely not the case if she can fund a 4 bedroom house without needing money from you!

It seems that this request is not so much about money - of course she can find somewhere within the divorce settlement - it’s more about her dragging you into the emotional tangle of the divorce drama as the settlements & finale of the divorce process looms.

The money is a Trojan horse for the emotional tangles & playing out of the unresolved grievances between the divorcing couple. Don’t take the bait.

‘I am happy to help‘

Do not get involved...

@CherryPavlova

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.

This.

MIL is cash rich and wants to lend us £20+k for a purchase that would be great but isn't necessary.

DH is fairly excited about it, but I couldn't be less comfortable.

We did take a substantial amount of cash from her at the start of the year when our bank fucked up and we were under pressure to pay for mega important stuff which would affect 15 people in total (think essential building works) but when we got it sorted (approx 2 weeks) it was paid back in full immediately.

I am totally not going there.

She sounds like she's digging, unfortunate as the situation is.

Your DH needs to message or speak to her and say “sorry sis it’s a no. I just can’t afford it. I should have just said no straight away but I was a bit shocked to be asked for such a large sum. We are really struggling to keep the business going as it is. Mabelandivy is already working extra shifts to earn a bit more. If you are having to borrow to buy this house you really can’t afford it. And do you really need such a big house for just two of you? Maybe you should look for something else?”

And leave it at that.

I got confused about who she was. Still wouldnt lend her any money though. She doesntneed a 5 bed house. She just wants to show off.

For everyone asking how she will afford the maintenance and bills on a 5 bed house - maintenance from ex husband. As she would (almost) afford a 5 bed from the divorce settlement and she doesn't work she will definitely be getting a hefty monthly maintenance from ex husband until her child is 18.

Speaking as someone who's DP is paying more monthly maintenance to his ex than I earn monthly! stings

Never make personal loans unless you can afford not to ha e it paid back. If she fails to repay and you are in financial difficulties will she reciprocate? Could you afford to take her to county and force a sale to recover your money? Would you want to?

No - I don’t think it is a good idea, or reasonable on her part, to lend for what seems to be an extravagant purchase. She needs to find another house she can afford, which doesn’t sound at all unrealistic given what you’ve said.

Is she the youngest child by any chance?

This happened to me once. We sold our house and were renting whilst we found another. My SIL asked us to lend her hundreds of thousands of pounds, basically all the money we had in our house, leaving us with nothing for a family home. When we said no, she and MIL went into a massive sulk. This person really didn't get it that that money was for a home for our young DC and she, a single person wanted a 3 bed house.

Tell her she needs to find a rich second husband.

@WokesFromHome :o The sheer thoughtless brass neck of it!

That should have come out as

Many years ago my sister came to me to ask me to lend her the deposit on a house. It was one of those dodgy adverts you see on the back page of tabloid papers. However I was warned in advance (that she was on her way) by another relative who had just refused. I just pretended not to be at home that day.

Never lend money to a friend or relative or agree to be a guarantor for them. Its a highroad to trouble.

Helping family in time of need is good and decent and I applaud your DH for his generous thoughts. If his DSis was stuck for a roof over her head it would be fair enough to tighten your own belts to give her a necessary hand up.

HOWEVER. This is not a time of need for her, it's a time of need for you! She doesn't need the money to keep a roof over her head. She wants the money so she can have a far more palatial roof over her head than her means dictate - and that's not the difference between a hovel and a cottage, it's the difference between a pleasant home and a show home. Meanwhile your own position is quite precarious.

You should be saying to her "Now you have the divorce settlement, you can afford to lend us some to keep our business afloat and save me having to work so much overtime. If you buy a flat or small semi you can easily spare us £x'000..."

Perhaps the idea is that if your business goes under and you have to let your own house go, she can put you up in some of her spare bedrooms.

No
nope
not a chance
Never
REPEAT

I'd give money to family for anything essential, but she wants you to pay for her lifestyle choices. She can afford a home big enough for her needs, but she wants you to dig into your safety net to pay for her wants.

Just, no.

If she's selfish enough to ask that, there's no way she would repay you (not that I'd ever expect a family loan to be repaid). I bet she would also disclose your loan as a gift, and so wouldn't agree to any documentation to designate it as a private loan.

She needs to adjust her expectations, fast. When you're divorced, what you can afford changes.

The only gift she should get from the pair of you is a life lesson!

I don't think the law should allow a single-adult council tax
discount when that single adult lives in a 5-bed, with just one child, and has deliberately planned it that way from the start.

Presumably, her only income will be child-related - maintenance, CTC, child benefit - and there will come a time when her child is no longer a child. What is she planning for when that time comes? Is she still expecting to live on her own in a 5-bed, with no job and no income but unemployment benefit? And you can be sure that whatever money you did lend her would still be 'pending repayment' as well.

I may be wrong, but she sounds like the kind of person who grew up relying on her parents for a privileged lifestyle, then switched her reliance to her husband to be kept in luxury; and now her husband is gone (except for presumably providing for their child), she's looking for a new 'mark' to keep her in the style to which she's always been accustomed.

Sad to say, if you stump up this money she's asking for, that will send her the message that you're always good for the plucking and you'll never hear the end of it. I wouldn't even put it past her to blame you for agreeing to lend her the money for a big house without being willing to help her maintain it - like you've 'deceived' her by leaving her high and dry and abruptly cutting off the 'support' that you 'promised'. 'Don't you love your nephew and want him to be happy' etc.

I suppose @mabelandivy you can always move in to the 5 bedroomed house,when everything goes tits up.