Wifes friend wants to borrow some coin - PeachParts Mercedes-Benz Forum

The Swede · #1 08-14-2009, 12:33 PM

Excuse my punctuation as Im using the phone...

A friend of my wife and former co-worker wants $1200 "gifted" to her (has the state form) in order to buy a house. She mentioned in her request, which is in the form of a typed letter, that she would pay us back.

I'd have to re-check the details, but iirc she didn't qualify for a loan becuase of overtime (she's a nurse).

They are good friends but it seems like an odd request.

For some reasom my scam detector is going off. I can provide more details when I go home and re-read the letter.

Fulcrum525 · #2 08-14-2009, 12:37 PM

If you move forward with it, get a legally binding contract before anything else.

aklim · #3 08-14-2009, 12:41 PM

Here is the question I have. If it is "gifted", doesn't that mean no repayment is expected? If you present a demand for payment, did you lie on your original form? I think this is a little too much to ask. You are not asking me to spot you $10. So, you basically are going to have to be willing to write off $1200.

She says she will repay you. How do you know she will do what she says? You want a contract? To be upheld by what court?

http://articles.directorym.com/Finding_a_Down_Payment_to_Buy_a_House_Minnesota-r935206-Minnesota.html

Using a Gift to Help With the Down Payment

Family, especially parents and grandparents, will often help with home purchases. As a practical matter, the gift must come from a close family member -- the lender involved in the rest of the deal won't trust that gifts from distant family members or friends are not secret loans.
Borrowing Down Payment Money From a Relative or Friend

Another way to raise money for a down payment is to borrow it from friends and family -- many people prefer to ask their loved ones for a loan rather than a gift. Of course, you must repay the money, and your bank or institutional lender will factor this addition to your debt burden into its own decision on whether to loan you money.

I know what you're thinking. "Will she return the money without issue or not?" Well, to tell you the truth, in all this excitement I kind of lost track myself. But being as this is a $1200 issue, a very big dollar sum, and would blow your wallet and/or checkbook clean open, you've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?

The Swede · #4 08-14-2009, 12:48 PM

This woman is a hard luck case. Rough background, put herself through nursing school etc. Afaik she's honest, but she knows that we are good for the money too. She stayed at our house 2 yrs ago and at our family retreat in Naples, FL.

E150GT · #5 08-14-2009, 12:53 PM

She didnt qualify for a loan because she works too much? Seems odd. Anyway, I just basically gifted my sister $1370.00. I do expect her to pay me back, but who knows when that will happen. The thing that sucks about lending money is it never comes back they way it left.

aklim · #6 08-14-2009, 12:57 PM

Quote:

Originally Posted by E150GT

She didnt qualify for a loan because she works too much? Seems odd. Anyway, I just basically gifted my sister $1370.00. I do expect her to pay me back, but who knows when that will happen. The thing that sucks about lending money is it never comes back they way it left.

You have bigger stones than I do. I never buy, sell or trade with family.

Chad300tdt · #7 08-14-2009, 01:02 PM

If you can't afford to just give the money, don't do it.

E150GT · #8 08-14-2009, 01:53 PM

Quote:

Originally Posted by aklim

You have bigger stones than I do. I never buy, sell or trade with family.

I can live without that money. I know she will pay me back. I lent her money years ago, but never kept track of a total. I cant remember how much, but it was less than a grand. We worked out a deal and she gave me her laptop and I forgave the loans. This time around I wrote a check and can keep track of it. I am happy to do it for her, but I have two other sisters that I would never lend more than I could afford to lose because they are not good for it. They are still young, and I hope they will see that they need to pay their debts. I will not lend money to a friend. I have a broke friend who is worthless when it comes to money. I have another friend who has good intentions, but small income and lots of outgo. When he needs money he usually has to work on my car so he wont have to pay it back and I dont have to do it.

aklim · #9 08-14-2009, 12:59 PM

Quote:

Originally Posted by E150GT

She didnt qualify for a loan because she works too much? Seems odd. Anyway, I just basically gifted my sister $1370.00. I do expect her to pay me back, but who knows when that will happen. The thing that sucks about lending money is it never comes back they way it left.

Borrowing Down Payment Money From a Relative or Friend

Another way to raise money for a down payment is to borrow it from friends and family -- many people prefer to ask their loved ones for a loan rather than a gift. Of course, you must repay the money, and your bank or institutional lender will factor this addition to your debt burden into its own decision on whether to loan you money.

If she has a official loan and not a gift, the bank figures that into the equation. IOW, if you have 5 loans and you default, will I get paid when they sue you?

aklim · #10 08-14-2009, 12:56 PM

Quote:

Originally Posted by The Swede

Afaik she's honest,

Read my "edit" and see what you think.

Shakespeare once said:

Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.

dynalow · #11 08-14-2009, 01:05 PM

Quote:

Originally Posted by aklim

I know what you're thinking. "Will she return the money without issue or not?" Well, to tell you the truth, in all this excitement I kind of lost track myself. But being as this is a $1200 issue, a very big dollar sum, and would blow your wallet and/or checkbook clean open, you've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?

Thanks Clint, er Aklim.

Your valid points I agree with.

1. Be prepared to lose the 1200.
2. Be prepared to lose a good friend of your wife.
3. Forget her veracity with the application. Get a note signed. It may not be worth the paper it's written on as far as collectability, but you can get a judgement against her in court if she renegs. May be of some value.
4. See point 1.

aklim · #12 08-14-2009, 01:13 PM

Quote:

Originally Posted by dynalow

1. Be prepared to lose the 1200.
2. Be prepared to lose a good friend of your wife.

3. Forget her veracity with the application. Get a note signed. It may not be worth the paper it's written on as far as collectability, but you can get a judgement against her in court if she renegs. May be of some value.

1&2: I think Shakespeare has warned us that it was a distinct possibility.

3: But in court, aren't you going to have to say that you lied when you said you gifted her the money when it was actually a loan? You sure you want to do that? Aren't you going to be like the Einstein that reported to the cops that someone stole his pot? The only reason they didn't charge him was that there was no pot around and no evidence other than his words.

dynalow · #13 08-14-2009, 01:21 PM

Quote:

Originally Posted by aklim

1&2: I think Shakespeare has warned us that it was a distinct possibility.

3: But in court, aren't you going to have to say that you lied when you said you gifted her the money when it was actually a loan? You sure you want to do that? Aren't you going to be like the Einstein that reported to the cops that someone stole his pot? The only reason they didn't charge him was that there was no pot around and no evidence other than his words.

I assume that Swede wouldn't have to make any signed declaration about gift or loan to the lender. If the bank requires a signed declaration from the "lender" friend or relative my view naturally chnges. But if that's the case. how would the bank know where I got the money from if I decided to deceive them and tell them it was personal savings?

The bank's in the first position anyway. 1,200 would be a teensy weensy fib on the friend's part. If the lender is requiring 10 or 20% down, it's not likely to end up being litigated.

865sp300e · #14 08-14-2009, 01:25 PM

Make sure she has explored all her options. If she has a 401 and it is her first home purchase she can take out up to $15k with no penalty.

Angel · #15 08-14-2009, 01:26 PM

let me add my opinion (already stated)
only lend it if you never expect to see the money again. If she needs $1.2k to buy a house (paying realtor's fees ?) then she isnt in a good spot already, however, its difficult to argue that house prices are going to go down in the forseeable future...

And keep your family's retreat - you don't get retreats without being smart with money in the first place =)

-John