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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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:
Doveyouknow · 24/11/2020 22:24

I might consider it if they were willing to put a charge against the property for the amount you lend and I could afford not to have the money for a long time. However, it doesn't sound like that is the case for you.

friendlycat · 24/11/2020 22:24

They just haven’t thought this through properly as there are massive issues aside from just the ridiculous situation of borrowing from numerous family members.
Stamp duty on a second property plus capital gains when selling as they will have owned two homes. Not to mention two lots of council tax, two lots of utility bills, two lots of house insurances etc.

It’s a recipe for disaster and will end in tears. I suggest you get an accountant to talk to them further but definitely do not get involved at all. If it was something straightforward and simple you could consider whether you can afford this, but truly this is NOT straightforward and they are being unfair and stupid frankly. You sell one property whilst simultaneously buying another. Or you get a bridging loan at whatever the current interest rate is for such a loan but this isn’t how normal people approach buying and selling a property.

Welshcorriefan · 24/11/2020 22:24

Don’t you have to sign to say it’s not a loan when giving money for a house? Sorry if it’s already been said.

FiveFootTwoEyesOfBlue · 24/11/2020 22:26

I think if it was just the 10k from you and not all the other friends and family then possibly yes if you made it formal with a written agreement. But as they're borrowing from others too, then you don't know if you'll be bottom of the list to get repaid on the 12th of never.

Tistheseason17 · 24/11/2020 22:26

A simple text, "I've had a really good think about it and with job instability I'm going to keep my savings liquid and can't lend you any at this time as I can't be homeless - I trust you understand in these risky times"

Barton10 · 24/11/2020 22:27

Have they factored in that if they do not sell their existing house when they buy the new one they will have to pay higher rate stamp duty. This can be claimed back later on when they sell but it is more to find upfront. Plus their solicitors will need to do a huge amount of extra due diligence work and check out everyone who lends them money. I would say no if I were you. If they were going to be homeless it would be different.

ManxiousCat · 24/11/2020 22:27

The fact you are asking randoms on Mumsnet shows you have doubts about this frankly ludicrous proposal by your CF parents.

How do you know their property isn't mortgaged to the hilt or has other charges against it thus putting you and you other family lenders at greater risk of not seeing your money returned.

Tell them to get a bridging loan and don't enter into any other discussions about it.

PyongyangKipperbang · 24/11/2020 22:30

I would suggest you talk to them based on the assumption that you would be a named on the deeds as co owner until the money is paid back..... Once your mother cops on to that I rather suspect a) you are a nasty selfish untrusting bitch and b) she suddenly wont want your money anymore!

And I very much doubt this will ever happen, it seems so pie in the sky that they are trying to borrow from virtually everyone that it will come together.

mrsbyers · 24/11/2020 22:31

Tell them to take out a bridging loan

oakleaffy · 24/11/2020 22:31

@SupineSlumber
Having read your updates, no way would I be lending them a penny.
Your parents asking you to lend MORE money when you expressed concern is an absolute “No” .
Why on Earth can’t they sell first or bridge like normal people?
Something isn’t right, here.
No way should parents be supported in this instance.. it is very manipulative if your mother to have asked you to do this.
Hope you say No.
Could save a heap of trouble.
I lent money to family member then Covid struck..
So not got my ££££ back yet........

PyongyangKipperbang · 24/11/2020 22:32

Plus their solicitors will need to do a huge amount of extra due diligence work and check out everyone who lends them money

Very very good point.

Am I right in thinking that everyone who loans them money will either have to be named on the deeds or sign a "no interest in the property" type form?

cdtaylornats · 24/11/2020 22:33

Do you want to be in their will?

MotherofTerriers · 24/11/2020 22:33

It won’t work without proper legal agreements, their solicitors will have to check this because of money laundering regulations. If you explain this to them they may go off the idea

Riggle · 24/11/2020 22:35

I think they may have to pay capital gains on their current property if they no longer live there when selling. That could put them off this complicated scheme.

MrDarcysMa · 24/11/2020 22:36

I think it would be difficult for any mortgage broker to agree to this - surely it would involve lots of gift declarations etc ?

amitoooldforthisshit · 24/11/2020 22:36

If you do decide to lend them the money ask for some security.. eg jewelry, art, caravan, and such so that if it goes tits up you have a fallback and won't be totally out of pocket. If they protest just say it's what any responsible leader would do.

WhatKatyDidNxt · 24/11/2020 22:36

@SupineSlumber yeah l got that vibe from your original post but just checking. I have family members like that “BUT I WANT....”. Yeah lm sure you do but it’s not all about you Hmm. They don’t HAVE to keep the current house and lend the money but WANT to

MrDarcysMa · 24/11/2020 22:37

And all the money laundering checks for various family members etc would be a massive faff and costly.

StrippedFridge · 24/11/2020 22:37

This is easy to get out of. Say you've been through the numbers and have realised you can't afford it.

Then repeat "I can't afford it." Do not give any explanations of why you can't afford it, you just can't afford it. Do not make it your problem by suggesting bridging loans, selling the house or anything like that. Just: sorry I went through my finances in detail and have realised I can't afford it after all, in fact things are going to be quite tight for me this year, sorry.

eggsandwich · 24/11/2020 22:38

If you work you could use the excuse that there is talk of possible redundancies at work so in light of that news you will have to unfortunately retract the offer of lending them money.

LynetteScavo · 24/11/2020 22:39

Your parents are being massively unreasonable

BlueThistles · 24/11/2020 22:40

Do you want to be in their will?

OOooffft low blow .. very low blow...

Original poster
SupineSlumber · 24/11/2020 22:40

@MotherofTerriers

It won’t work without proper legal agreements, their solicitors will have to check this because of money laundering regulations. If you explain this to them they may go off the idea
Yes this was the initial concern I mentioned in my OP. I just don't want to be part of it.

Do I want to be in their will? Not sure how that's relevant...in all honesty, not especially. It's likely to be a highly messy and contentious process with resultant grief, like many of their other dealings (financial and otherwise).

OP posts:
veeeeh · 24/11/2020 22:41

Why are they moving?

If it is because they need level access, they could stick on a bathroom and bedroom downstairs, and have a chunk of change from their 100k savings.

I would not lend in the current climate. Stamp duty holiday ends soon, so they might not get offers then.

Oreservoir · 24/11/2020 22:41

Dont lend any money unless you're prepared to lose it and they're prepared to treat it like a legal transaction.
I've lent money to my dc in the past and we've drawn up simple terms and all signed.
My reasoning is you wouldn't expect a bank to lend money without a contract so why should anyone else.
Do not be manipulated by your parents.