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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:
isitsnowingyet · 25/11/2020 07:14

I agree with the above , I would lend my parents the money without doubt, Looks like most people on here value money more than family !!!!!

whatever.

Not everybody's life is so black and white. £10,000 is a lot of money and if her parents in their 60s own their own house, it's not like they're desperate for money as they're on the breadline. Maybe they are being foolish, and the OP doesn't want to join in with their foolishness.

MimiDaisy11 · 25/11/2020 07:19

Considering they could potentially be stuck with two properties with the need to pay council tax etc for both I think it's a silly idea. I also don't understand it from their POV as trying to raise £100k from multiple people seems so stressful when it's not even needed. I agree with others that it's more awkward that you agreed but I still wouldn't do it. Just say your situation has changed and you can't afford it or you have thought it through and realise it's not a good idea.

Obviously, you know your parents best. My parents are very trustworthy and would deliver on their promise so if I was in your situation I might do it, but I just can't see them doing something like this as it's not necessary.

DonLewis · 25/11/2020 07:20

The rule is to only lend money you don't mind never seeing again.

So if you're prepared to accept the possibility that the 10k actually turns into a gift, lend away. If you're not don't.

As for how the conversation goes, you just say that in reflection, you can't afford to lose 10k. So if something were to go wrong, you'd be stuffed. That's not saying you don't trust them, it's just self preservation. If they don't like it, it's tough.

MotherofTerriers · 25/11/2020 07:25

If they are serious about this why isn’t their house on the market, to at least minimise the time they need the loans for and confirm how easy or difficult it will be to sell?

OverTheRainbow88 · 25/11/2020 07:38

They also need enough to cover second home stamp duty if they aren’t selling first.

They can claim this back if their house then sells but it’s needs to be paid unfront

Clymene · 25/11/2020 07:42

I would expect if they're getting sums if £10k in from various people and then returning it within a few months (best case scenario) the bank will be all over it because of money laundering concerns. So it might get held up before they can get the money, putting the whole batshit scheme into jeopardy.

CSIblonde · 25/11/2020 07:51

This sounds so dodgy OP. I'm wondering if they've had a valuation & their house is worth way less than they thought, so they'll rent it & no one they've borrowed off will get anything back. Is it very run down or very dated? I worked for an estate agent, people get very put off if they're going to have to rip out an ancient kitchen & bathroom ,even if it's in a highly desirable area. These days, they want to move in & sit down. 'Projects' are far less popular these days.

CecilyP · 25/11/2020 07:53

The whole thing is crazy. If they were just £10k short, then it wouldn’t be so bad. With the proviso that they were normal parents and you knew they would pay you back. But, no, they are 100k short and trying to borrow from many different individuals. The whole idea is insane and you shouldn’t even consider it for a second. Withdraw on the basis that it is just too complicated. If it is such a good idea that they buy this house, they can take it to the bank and apply for a bridging loan.

diddl · 25/11/2020 08:07

There are too many variables-what their house will sell for (and when!), getting the money together from everyone else.

The fact that they only have have 50% is a bloody cheek as well.

Realistically, what are their chances of getting others to stump up the money?

Your saying no will probably have no impact at all!

DontDribbleOnTheCarpet · 25/11/2020 08:19

Your saying no will probably have no impact at all!

Or it may be the thing which makes it easier for others to refuse. Have you spoken to anyone else who has been approached, OP?

Given your parents' history of selfish behaviour, and the amount of money, I'd have to refuse. There is a perfectly sane, sensible way for them to get what they want, but they are choosing to ignore it. I wonder if what they really want it two houses?

diddl · 25/11/2020 08:22

"Have you spoken to anyone else who has been approached, OP?"

It would be handy if you did have an idea who others might be & sound them out.

Just in case they are trying to guilt everyone into lending "just the last few 000" that they need!

lastqueenofscotland · 25/11/2020 08:26

Not in a month of sundays.
Their house could have an issue it’s developed that no one is aware of that makes it unsellable.

yetanothernamitynamechange · 25/11/2020 08:33

I have "leant" my mum money in the past (not as much as 10k though). She was the one who insisted on it being a loan, I considered it a gift (and still do). I was very happy to do this, she was the woman who raised me, she needed it and it was money I could afford to give. In your situation I absolutely 100% would not do so though. Wanting to buy a house with cash is as far from a need as I can imagine, the idea of wanting to borrow money from family when they already have a big lump of assets just sitting there, plus the opportunity to raise a mortgage if needed is absolutely ridiculous! Plus 10K is a huge amount of money and could seriously impact your financial security - so you cant actually afford it in that sense

yetanothernamitynamechange · 25/11/2020 08:35

Also though, I micht have to play the "give me 10 grand or my feelings will be hurt" card with my friends and family. Ridiculous.

allthewaterinthetap · 25/11/2020 08:47

To quote a lovely phrase "The kitten doesn't feed the cat".

PurpleMustang · 25/11/2020 08:52

Just say there has been a big hush hush meeting at work about potential redundancies. Job done

cochineal7 · 25/11/2020 08:59

We were in a similar family-loan scenario and loan was made but completely on commercial terms - so loan agreement, interest payments (paid from rental income on the ‘retained property’) and as amount was larger we even added a mortgage interest. (The latter was tax advice - nonUK).

BlueThistles · 25/11/2020 09:13

I think the glaringly obvious point most people are missing is that OP Parents cannot be trusted .. they are financially frivolous have form for borrowing and not paying back and OP will not see this hard earned/saved money ever again 🌺

which is very different from ... my parents are loaded and I would give them everything as I know Id get it back...

OP will not get it back

contrmary · 25/11/2020 09:16

Parents should lend (or just give) their children money, not the other way around!

dewisant2020 · 25/11/2020 09:31

Personally I'd lend it to my parents, but I know for a fact my mum would pay me back

Original poster
SupineSlumber · 25/11/2020 09:34

Update:

Got a text from my mum this morning re: the subject of wanting me to give them more than 10k. She’s asking me to state that I will gift them 15k (and to show a bank statement with that amount), but (to paraphrase) ‘it’s OK, we know you can only give 10k - that’s fine. We’re not actually asking for 15k, just need you to say you’re going to gift that amount’.

I don’t know if this is meant to be reassuring but has just confirmed my suspicious that I shouldn’t be part of this. No idea where the other 5k is coming from. Haven’t replied to the message, will probably phone at night in what is sure to be a very awkward call. sigh

——

Thanks to previous posters for support and kind words. To answer a question, I’ve spoken to another party they’ve approached, who can actually lend almost the full amount: they’ve refused and have offered, at most, to buy the house for them subject to conditions. Parents have refused.

OP posts:
lyralalala · 25/11/2020 09:35

I’d actually be concerned where your parents are getting the money from.

Someone is obviously giving them the other 5k, but why would they not be able to say?

BlueThistles · 25/11/2020 09:40

just need you to say you’re going to gift that amount’.

this statement in writing alone would guarantee you never saw a penny of your money returned.

you are right to say No 🌺

RinderTinderNotRinderGrinder · 25/11/2020 09:40

I’m guessing they have been asked to prove they have the funds for their offer to be accepted. Stating something you know to be untrue would be fraud.

I’d definitely lend to my parents if I could because they are financially sensible and wouldn’t ask unless it was necessary. They’d never ask me to say something that wasn’t true for their benefit.

I wouldn’t lend your parents anything. They’re being daft and need to do this properly. You are far from their only option.

1099 · 25/11/2020 09:40

I sympathise OP my (not so D) F rang me recently to tell me he was thinking of moving to live with me, he was pretty surprised when I told him that wasn't something that would be happening.
Stick to your guns and don't get involved, you'll be bottom of the pile for repayment and inevitably it will move onto "We'll put something extra in our will for you"