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)

Can you still get out OP?

It’s such a bad idea financially and it’s such an uncertain times, they may not sell the house for what they think it’s worth... or not at all what then?

Don’t do it!

People can't just lend them money for a house purchase. Solicitors will have to verify each person's money and where it came from, and anyone providing a 'gifted deposit' will have to have their identity verified for money laundering checks.
What happens if they don't get the amount they hoped for their house?
They sound very entitled!

I've done it. There were a lot of legal hoops to jump through to do it properly.

One unpalatable consideration is what happens if they die whilst owning both properties - if there are no proper legal documents it looks like they are richer than they really are. This is what made us do it all properly.

At most, I'd lend them the equivalent of what they had helped me out with in the past, as when it inevitably fails to be repaid on the basis of 'YOU TOOK OUR MONEY', you can at least reconcile it as you paying them back for their help.

In reality, though, I'd more likely say 'Sorry, did some investigating and apparently it's all legally tied up for at least five/ten/a hundred years and I can't get to a penny of it'.

and then went they went ballistic, NO.

Because even if they were to pay anybody back (bet they won't, though), you would be the last on the list on the grounds that they gave you money before. Or that they brought you into the world, so owe them for the sleepless nights and nappy changes. Or some such bollocks like that because they don't want anything put into a legal framework, as that would make it possible for you to get it back off them.

There is no way I would have done it given the way your parents are behaving about it though!

This is insane! They can sell their house to pay for the new one just like everyone else has to!

Good grief. There is no way I’d agree to this unless I fully accepted that I would never see that money ever again because I’m telling you- that is what’s going to happen here. There are red flags all over this scenario for reasons other posters have already listed.

I have done this, to help my parents when they were moving countries and couldn’t get a bridging loan. But at their suggestion we had a legal agreement drawn up with a charge on the property, to protect my money. We were concerned that they might die and then it could have been complicated, with complex stepfamily inheritances, to get my money back. I’d be hesitant to do it alongside so many other lenders though. Also my parents would definitely have got a bridging loan as a first option if it had been possible.

Unlike most of the posters above, I would lend them the money without hesitation and in fact I may well do something similar with my parents. However, it all depends on your relationship with them and your personal financial situation, of course.

My father came to us with the request for 36k which was all we had in savings for our next house move, his business was failing, the creditors were coming at him. OH said up to you. I said no because I knew the business was being run very badly and monies might be needed to help them in other ways. So no I would not have.

Have lent to two DCs one has paid back more than half of it now. The other has only just borrowed from us a really large sum, we do not expect to see any repayments for a year or more. But in our hearts we have written it off and if necessary will put a codicil in our wills so that the others do not suffer.

OP- you describe your parents like this:

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)

But then say you can’t say no to then and will make up a story about some fictional financial advisor telling you not to. Fuck that. Simply say “no, I don’t want to do this”. That’s it. Don’t make up lies or justifications- no is perfectly adequate. If they can be stubborn then so can you- tell them you’ve inherited that trait from them! Seriously- you do not need a reason to say no. Besides, whatever reason you give they’ll argue it anyway so just saying NO is far easier.

However, it all depends on your relationship with them and your personal financial situation, of course.

talk about stating the obvious

Bridging loan, it will give them the impetus to get their existing property sold.

That sounds like utter madness. Especially if you don't even know for sure who else is lending them what.

What happens if something happens to one of them between times? I know it's unlikely, but sometimes care needs are very quick in raising their heads and LA's are getting much more ruthless chasing money. Owing 5/6/7 family members 100k-150 is going to raise eyebrows.

And if they can't or don't sell the original house the mess of untangling that when they pass would be an absolute nightmare.

Unless you are prepared to hand over 10k and write it off I'd steer well, well clear of that scheme.

What planet are they on?! Of course not. They sell first like everyone else.

Also as their child you would be the most likely to be on the receiving end of a "Well you can get it back as part of your inheritance" line than most.

No I wouldn't. My mum is very entitled regarding money. Having gone from being poor to meeting my rich dad, and being gifted property and inheriting from his rich family. She has barely worked since marriage or understood the value of money or passed anything down. She's happy taking money but not giving it. No way would I lend her any.

From the way to describe your parents, it would definitely say no.

You are being very wise op. I would tell them honestly why you don't think it's the best idea.

I think the house they want to move to is probably at the very top of their budget and they are trying to move quickly as a way of sticking their heads in the sand about the pitfalls.

They may thank you in the long run.

If it makes you feel better, I asked one of my siblings for a loan because we were in dire straights. She said no but asked if she could help me talk through my situation and work out solutions. I'm very grateful that she didn't loan me money, it would have made things much worse.

youre not a bank and you tell them too much info they obviously knew you already had savings

I’d be very surprised if they found another 9 or more people willing to support a whim of this couple, especially in current climate and their unwillingness to have a legal agreement drawn up.
Sounds very dodgy, i’d be suspicious that there’s not much equity in their current place and they are looking to buy elsewhere propped up by family loans and then rent out their house to generate money.
They sound financially irresponsible and entitled.

I’d just say that your job is at risk and you cannot afford it. And repeat.

If they’ve got a silly notion about being entitled to be cash buyers, they might get other silly notions. Such as you don’t really need to be repaid, it was a gift, and they deserved it.

In the current climate no.prices will drop when stamp duty holiday ends .

They should buy it with a mortgage, then sell their existing house and pay the mortgage off.

They asked me how much I could lend them

I wouldn't like this - very presumptuous

Depends on your relationship with them tbh . I’d give my parents £10k if they needed it .