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I'm looking for a place in Spain, if you've got spare cash... I'll even put your name on one of the villa's bedrooms...
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No offence but this is a fucking terrible idea
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It's not uncommon for a family member to give another a 'gift' for a house deposit, I am considering something currently with giving someone in my immediate family money for this purpose. The advice so far has been to sort out amendments to Wills in the unfortunate circumstance one of us pops it.
Giving to a friend, I don't imagine it's much different, but in any case the mortgage lender hasn't asked, does it matter to them any more that you won a raffle or inherited a tin mine in Devon?
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Isn't there an issue here that you'll have an interest in the property.
ie should your friend default you'd have a claim to the amount lent. -
A mortgage broker would be best place to tell you and your friend how to account for the loan.
As long as you're ok with not having the principle repaid, your mate begrudging you for the loan and avoiding you then there shouldn't be any issues.
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Not investment but not entirely unrelated.
I'm considering lending a friend some money toward a house deposit. They've not asked and I've not offered yet. I don't have any concerns about trustworthiness or ability to repay, and I've no need to make any money out of it. I'm happy to lose the equivalent interest by not investing it.
But when applying for a mortgage the bank will obviously ask about anything owing. Ideally I (and I imagine my friend) would like it to be above board. So calling it a gift probably isn't advisable(?).
Is something like the following at all legit?
Lending (for example) £10,000, at a rate of 0% interest, to be repaid over the next 20 years, allowing unlimited overpayments.
In reality, they'd be able to repay over a couple of years, but I suspect the bank would prefer seeing an outgoing of £40 instead of £400pm.
Naturally I'd just forward the bank manager to this thread as proof that I've been properly advised by LFGIFA's.