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)

@BameChange123

Can't they just do an equity release on their existing house so they don't need to sell and you r family members don't need to.lend.

Equity release is for when you want intend to stay in your current home - normally in return for cash they get a disproportionate share of the house so when you die or sell that portion goes to them. It is a bad idea if it is just to release money to help with a move.

@BameChange123

Can't they just do an equity release on their existing house so they don't need to sell and you r family members don't need to.lend.

the general consensus is that they have remortgaged to the max and therefore cannot even sell the house ... so I think not 🌺

You shouldn't do it. They aren't homeless or living in dreadful conditions, are they? The just want to move but haven't organised themselves to do so; if they do the basic things, like selling the house they've got, they don't need your savings. Also, aren't there strict limits on what you can give to someone without tax implications? You could end up being liable for paying tax on the gift, and without any legally enforceable repayment agreement , it would be a gift not a loan. If you were guilted into lending them the money the only thing you could do would be to make sure that you had a legally enforceable charge over the property (with interest at a commercial rate) coupled with a right to enforce ( by forcing a sale) if they didn't pay you back. Make sure they pay your legal fees too. Just think, in 6 months from now you parents would be in their dream house, you could really need your money for basics and they might not be in a position to repay you. No guarantee that their house would sell in the meantime & you'd probably be made to feel awful asking because ' when we go, you'll get it all anyway".

maybe.....

they are close to having the house repossessed 😱

Well done OP do not touch this with a bargepole. Ever.

If it was just the 10k they needed then if be inclined to do it. But the fact that they're trying to piece together 100k from multiple sources makes them cheeky fuckers.

Go Fund Me pages are pretty successful and judging by the amount of posters more than willing to donate £10K and more... the Parents might be successful in raising the funds and quickly 🌺

They are lying.

I agree with those who say it's more likely that the house is either in massive negative equity thanks to remortgaging and/or they've already got an equity release on it. So they can't afford to move. The only way they can move is to get lots of additional money, buy a new house with proof that all this new money is 'gifted'... then sell the old one, pay off the mortgage if they can, and then go back to their lenders and shrug shoulders and say they didn't get as much as they expected for the house and can't pay back.

I would agree on getting a copy of the deeds OP, it's super cheap and will tell you everything you need to know! And then if you really want to light the touch paper you could simply reply to the next manipulative text with a photograph of the bit where it tells you what the charges on the house are and a raised eyebrow emoji :)

I'd tell them they're being stupid and to do it the normal way instead of pissing off family members

And yes she said gift and give A LOT.

They're planning on lying to the estate agent and declaring the money a gift. If you do this you won't get it back and won't have a leg to stand on in court.

@BlueThistles

From what the OP says there isn't a lender so the confirmation must be for some other reason, it would be interesting to know what that is

Aaahhhh interesting ....

and well done for spotting this 🌺

Not that interesting nor something 'clever' to spot, really.

We are lending DS some cash towards a property, the rest is a lump sum that is his - no commercial lender at all. For money laudering purposes the solicitors want to know it's not from drug sales. Same thing here.

@toconclude

Not that interesting nor something 'clever' to spot, really.

it's interesting to me...

and where did you pull 'clever' from ?? your rude ARSE

I am very keen to see how this develops... i’m sticking around

me too 🌺

Well thank goodness that seems over (for now). Horribly awkward phone conversation with mum, who seems to be spearheading this whole process. Lots of antagonising statements with me uhmming in robot mode (survival / just get through the call strategy).

New narrative is: “we’ve now decided to sell our house first. We were there with the 100k we needed, even without what you were going to give, but “let’s see”...’ (see what, I don’t know)

Highlights:

‘The people we’re borrowing from, we’ve helped in the past, they know what we’ve done for them And that’s what friends and family do. It’s these little little things’. (She loves this last expression)

‘Look, they’ve all said to us, take the money...pay it back whenever you can, we’re in no rush’. (Me: mmmmm)

‘We’ve supported our children to move and live wherever they want. Obviously you expect the same from them.,,’

I then spoke to my dad who seemed confused by the whole thing: has no idea who they’re selling it to, for how much or what the timeframe is. Doesn’t exactly inspire confidence.

I forgot: ‘this is how we’ve always bought our houses in the past!’

What is your DM on about it??

Bonkers!

I know that my sibling (yes, the one who offered to buy the house for them) strongly tried to convince them not to go ahead with doing this their way. And refused to lend / ‘gift’ any money. Maybe that swayed it. I’m just glad to be out at this point.

Fantastic OP... well done and breathe...

very hard thing to do.. and you got there

Not read it all but unless you are willing to lose the lot, I’d not be doing it.

Blimey it gets even more bonkers but hey hopefully this ludicrous idea has now gone away as realistically it never was a goer.

It must be very hard to listen on the other end of that type of conversation, but try hard to remember you were not the only family member against it and not prepared to proceed as your DM thought it would do. Perhaps there was an element of her doing the “saving face, I know I was right” in the silly comments you listened to. But there is never any reasoning with the unreasonable as they just don’t understand logic.

@SupineSlumber

I know that my sibling (yes, the one who offered to buy the house for them) strongly tried to convince them not to go ahead with doing this their way. And refused to lend / ‘gift’ any money. Maybe that swayed it. I’m just glad to be out at this point.

Your sibling could, however, if they have the cash buy a share of the house and get reimbursed later down the line. However, I’d be wary of that one due to how your mother is being. Well done for sticking to your guns!

‘The people we’re borrowing from, we’ve helped in the past, they know what we’ve done for them And that’s what friends and family do. It’s these little little things’.

‘Look, they’ve all said to us, take the money...pay it back whenever you can, we’re in no rush’.

You know those statements aren't true. Your sibling has refused to get involved. Does DM know that you've spoken to sib?

That sounds like a bonkers plan by your parents OP. There are so many things that could go wrong and they don't really need the money as they could just sell their house!