Should I lend them 10k?

[SupineSlumber]

My parents, in their 60s, are planning on moving house. They’ve found somewhere that they like, and they want to buy it outright with cash, without having to wait to sell their own house first (although they said they hope to sell as soon as possible). However, they don’t have the necessary amount: they have 100k in savings, and are looking to borrow another 100k from selected family members/close friends (not exactly sure as they haven’t told me but I can hazard a guess). They’re very stubborn and are adamant that this is the only way they can secure the house that they love, without being part of a chain etc. Selling their own house would effectively cover the cost of one they’re moving to so they have that as an option but they don’t want it.

They asked me how much I could lend them, and it’s comfortably about 10K. But now I’m thinking this whole thing might be a bad idea. I don’t know who they’ll be borrowing the rest of the 90k from and I don’t want to audited as part of that process (not that there’s anything to hide, but it just seems very messy). Also it just feels extremely indulgent to me, to try to be in the position of a cash buyer whilst roping in lots of people to fund that through loans. What if their house doesn’t sell as easily as they think it will?

Am thinking of withdrawing the offer on the basis that it might not be financially prudent, but I know they’ll be hugely hurt. WWYD?

(NC just in case)

As much as it would be lovely to support them its a big risk. I would only loan the money out if you could afford to lose it (worst case scenario)

Personally I wouldn’t lend anyone any money I would be sorry to never see again.

I would follow your gut instincts and I think it’s a bit cheeky for them to ask people to lend them such huge amounts tbh.

I wouldn't touch this with an extremely long barge pole, at the moment you never know when you will need the cash.

Why on earth don’t they sell first?? That’s what other people do.
I’d lend them it if I could afford to lose it but it’s ridiculous. They should just sell their home

No way jose.

Simple answer? No.

If you have that amount of money that you can afford to write off if it never gets paid back, go ahead.

Way too messy and the pitfalls and fallout could be huge, way more than if you say no now.

No. They don't need the money, they just want to do it this way. Not being part of a chain is a bonus but it's not essential

Why cant they just sell their own house first? Or get a short term loan from the bank?

I think they need to sell their existing home first like normal people would TBH. It is indulgent and not real life, you would be lending money without a clue of when you may get it back.

Nope do not lend them it. How do you know they won't turn around and go 'we can't sell the family home, we are going to rent it instead' and bring in a nice income for them?

They can sell their home first and be part of a chain like everyone else.

As part of money laundering regs don’t they have to show where they got the money from? I would only do it if you had a legal agreement drawn up and witnessed covering repayment.

Oh wow! No I don’t think I would lend the money. If they want to buy outright they should sell their place first and use that money towards it. How are they going to pay back the £100k loan? Presumably via the house sale? So if they are going to do that anyway they should see what they can get for it and work out what they can afford.

It depends on your history with them but if you can comfortably afford it, I think I would, but I’d put a fixed term for repayment on it, say 12 months, and tell them you want to do it properly with witnesses signatures.

I wouldn’t no. As you say there’s no guarantee their house will sell quickly, or they might not like the offers they get (the market is a bit wobbly in places at the moment) and want to hold out - and there’s no incentive if they’ve already funded their new place. And as others have said, who knows what may happen in the mean time which may mean you need the 10k - especially with financial uncertainty from covid and brexit etc.

They’re too old to be so irresponsible. And borrowing money from friends? That’s outrageous. It would be a big No from me.

They have to sell their house first, that's how things are done.

Presumably their own house is paid off? Why can't they re-mortgage temporarily?

Hmmm, agree that I'd only lend money that I'd be happy to write off.

I've done it in the past (nowhere near as much as that) and both times the family members have taken much longer to pay me back than they'd initially said. I'd actually written one of the loans off but then out of the blue it was eventually repaid. And these were both family member that I'm very close to.

However, they don’t have the necessary amount: they have 100k in savings, and are looking to borrow another 100k from selected family members/close friends

Wow. What a generous offer. No thanks!

If they don't have the cash they can't be cash buyers and need to sell their own house first like anybody else.

What happens when they decide they can't bear to let go of their old house and want to keep it as a retirement nest egg?

I doubt you'd see any money you "lent" them again.

Smells very fishy. You'll be in a queue of how many people for cash. They may or may not realise what they expect in their property. They may refuse to sell. Its incredibly presumptuous that you will support this, too. The only way to guarantee to get your money back would be a charge on their property and that feels very legal and hard. A bright and breezy excuse about not bring able to afford it would be the best bet!

I'd lend my parents the money if they asked, but I know that they'd pay me back so I wouldn't be worried. However it seems like a strange way to buy a house, why not sell first like a normal person?

They’ve found somewhere that they like, and they want to buy it outright with cash

Wouldn't we all? They can't afford to. Would they do the same for you? I'd just pretend I don't really understand what's going on and not offer any money - way too complicated.

Jesus no.

Especially not with ‘stubborn’ aka arsey buggers who won’t even speak to you in a mature way about it. And that they are asking you all -!!!! Omg the brass neck. I’d be worried that they’d be just as cheeky when it came to repaying it...

Do not lend them this money, they will guilt trip you into not asking for it back. They can sell their house and then buy the next, just like everyone else does!

@BonnieDundee

Why cant they just sell their own house first? Or get a short term loan from the bank?

Sheer stubbornness. An attitude of ‘our way or the highway’.

I’m inclined to go with the responses here. Initially said yes because I don’t want to begrudge them anything and they’ve supported me with small sums in the past (although nothing that I’ve asked for).

Red flag for me was when I mentioned how much I was prepared to lend, and that I have other considerations (job loss risk, need to have 6 months with of living expenses in the bank) - they tried to convince me to go even higher! Completely tone deaf and insensitive and cemented the idea that they’ve become blinded by this artificial need to be cash buyers