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AIBU?

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Original poster

Should I lend them 10k?

355 replies

SupineSlumber · 24/11/2020 21:16

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)

OP posts:
Alexandernevermind · 24/11/2020 22:08

I would lend it to mine if I were the only lender, but I dont like the sound of so many others being involved. As others said, you could be at the bottom of the list if the property market collapses and they don't get back what they expect from their home sale. If interest rates shoot up the market could drop - who knows, anything could happen after what we've all been through this year!
If you do go ahead you must have something in writing giving an exact date the monies will be paid back by.
If you decide not to, then tell them you have heard your job could possibly be vulnerable and you therefore need to hold onto your savings.

oakleaffy · 24/11/2020 22:08

@SupineSlumber
If you can afford to lose £10k, lend it,
If not, DON’T.
People inc family can fall out big time over money .
Why can’t they get a bridging loan?

foxesandsquirrels · 24/11/2020 22:09

No.

Original poster
SupineSlumber · 24/11/2020 22:09

@WhatKatyDidNxt

No. They need to do what most people do and sell then buy. Then lending money of all and sundry is cheeky and ridiculous. Do they normally want to do such bonkers things, that are all about them?
Yes, they are regularly outrageous and sadly have form for this kind of entitlement in their lives (mum especially) and are prone to using every single trick in the book to get what they want. Even if it means pressure of manipulative tactics (like asking me to give more than what I reasonably said I could afford).

I can't even vouch for the veracity of what they've told me (they say they have 100k, it wouldn't be impossible for it to be150k). 'A flexible relationship with the truth' is a gentle way of putting it.

OP posts:
duckduckswan · 24/11/2020 22:10

Bridging loan?

Luciferthecat666 · 24/11/2020 22:10

OP after reading your updates especially the part where you said they would be offended if you drew up a legal agreement to pay it back and the fact they asked for more when you expressed concerns that you may need it in case of an emergency, based on that definitely don't do it!! Just tell them you are no longer in a position to give them the money. Do not apologise and don't get into with them just stay firm and repeat "I am no longer in the position to do this" and refuse to discuss. I would also be prepared for them to use the classic guilt trip "but we've given you this and that over the years" or the "we would do this for you" if the situation was reversed. I'm wondering if they did try and get a temporary bank loan and were turned down hence why they're now asking the family for a handout because they know they can't bump a bank loan but they can be difficult about repaying family especially with no prior legal agreement in place

VestaTilley · 24/11/2020 22:11

YANBU- if they were in financial peril and going to lose their own home then of course offer them a loan (IF you can afford it) but to borrow £10k off you just so they can trade up?? Madness. No. Not in this economic climate.

DisneyMillie · 24/11/2020 22:13

To my parents - without hesitation. Any amount they asked for pretty much if I had it.

Should you to yours - given what you’ve said probably not

PhlegmyHead · 24/11/2020 22:13

How would you feel if 2 months down the line - after they'd taken your money and moved into the new house - they decided they didn't want to sell the old house after all, and started considering the loan as a gift, or a long term thing?

BlueThistles · 24/11/2020 22:14

omg NOoooooooooooo Shock

tell them you would need to take out a loan and you cannot feasibly do that.. do not start explaining your finances/savings/earnings to anybody OP Flowers

Anusername · 24/11/2020 22:15

Yeah that’s a possibility. But I also think that since even their child is unwilling to lend them 10% of the total fund, it would be very difficult to raise the fund anyway. So it’s very unlikely to buy their dream house with cash. I think it’d be very painful to know that even their child is relunctant to support them.

Forgetmenot157 · 24/11/2020 22:15

Absolutely not... With the economy the way it is, no job is safe, I was in a job I considered safe and have been made redundant... You never know when you will need that money.... For them to want other people to fund half of their house purchase is pretty selfish just because they can't be arsed to wait to sell their home!

Freefalling123 · 24/11/2020 22:16

As a PP said, they’ll also need to factor into their budget paying stamp duty as technically this Is a second home they’re buying - this is still payable now even though not on first homes. They can claim it back within 3 years if / when they sell the other house, but have to pay it on purchase of house two.

My mum has just done this - she was able to fully purchase a property for cash so it could be adapted for her needs, before old house sold. So I know she had to pay stamp duty on purchase, which was about 3 months ago, and is now claiming it back as old house sale has now completed.

TatianaBis · 24/11/2020 22:16

@DisneyMillie

To my parents - without hesitation. Any amount they asked for pretty much if I had it.

Should you to yours - given what you’ve said probably not

Exactly what I was going to say.

With mine I could be sure of getting it back. With OP’s, I’m not so sure.

I seriously doubt they’d manage to pull together the rest of the funds from friends.

I would just advise them to take out a loan as being the most reliable and least stressful way of getting the whole amount quickly in one go, and the inadvisability of borrowing from friends.

Chocolate1984 · 24/11/2020 22:16

We all loaned my brother money to buy his house. I think he borrowed about £90,000 but I think only gave him around £12,000. We knew he would pay us back, trusted him 100%. We knew he was going to sell his house for much more than he borrowed, we didn’t need the money back urgently. I trusted him, he’s my brother, I can’t see any reason not to help him. I know he would do the same for me.

ScrumptiousBears · 24/11/2020 22:16

Their behaviour hasn't been good so far so I'd wonder how it would be once you've parted with the money.

justconcedealready · 24/11/2020 22:16

Tell them your job has issued a warning that cuts might have to be made, and you can no longer lend anyone anything at this time. Then never agree to do so again.

Neolara · 24/11/2020 22:17

Won't they have to pay capital gains tax on their original house if they sell when they have a second home?

TimeQuest01 · 24/11/2020 22:17

Yes, they’ll have to pay 3% extra stamp duty.

They’ll recover it if they sell the other house within 36 months.

Ask them if they’ve taken that amount into accounts

Also, as others have said, there are strict anti laundering checks, I don’t think it’s going to be as straight forward as they may think .

justconcedealready · 24/11/2020 22:18

This shouldn't be a hard decision for you, btw: they've got money, they've got a home, they won't be homeless. They can do what everyone else does, sell their home first!

BakedTattie · 24/11/2020 22:20

From the info you’ve given - hell no!

TeamLannister · 24/11/2020 22:21

Tell them to jog on, cheeky fuckery at its finest. And balls to any offence they might take, it was hugely offensive of them to ask you for money and then press you for more than you can afford, that's pretty abusive. It's also most suspicious that they aren't just selling their own house first as normal, I wouldn't take their reason or explanation at face value.

Queenie8 · 24/11/2020 22:21

Your parents solicitor who would be handling the purchase will be required to do due diligence and see a paper trail of where the money has been obtained from, so if they did go ahead, they would have eg 10 separate payments for £10k to account for. This will set money laundering alarm bells ringing, and all of the lenders would then need to be verified and investigated.

BlueThistles · 24/11/2020 22:22

We knew he would pay us back, trusted him 100%

the only relevant point in your entire post... you TRUSTED him...

not everyone can say this.... Flowers

OldieButaGoodie · 24/11/2020 22:22

Surely you're not the only one of these 'selected family members/close friends' who thinks this is an outrageous idea - I'd be surprised if anyone would agree to this. Sounds like wishful thinking on behalf of your parents - bit like 'when I win the lottery, I'm going to buy this house', but of course we don't win the lottery and can't afford the dream house..