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Stuart J
Stuart J, Solicitor
Category: Law
Satisfied Customers: 26472
Experience:  Senior Partner at Berkson Wallace
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Afternoon, I'm considering accepting a personal loan from a

Customer Question

Afternoon, I'm considering accepting a personal loan from a friend to help my partner and I get a mortgage. Is this something both parties should do through a solicitor?
JA: Where are you? It matters because laws vary by location.
Customer: Cardiff, South Wales
JA: What steps have you taken so far?
Customer: Just an initial discussion, with no amounts specified or terms brought up. Just the idea.
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: Nothing else :)
Submitted: 15 days ago.
Category: Law
Expert:  Stuart J replied 15 days ago.

Hello. Thank you for the question. It is my pleasure to assist your with this today.
I have been in the legal profession, in high street practice, for 30 years so I have wide range of experience in a great many different aspects of law.
Please bear with me and I will be online and off-line from time to time and therefore, may be delayed getting back to you. You will receive an email when I reply.

Expert:  Stuart J replied 15 days ago.

is this for deposit?
can you both get a mortgage?

and what is this person getting from lending this money?

Customer: replied 15 days ago.
Many thanks Stuart!
Customer: replied 15 days ago.
It's to help with a deposit for my and my partner who would be first time buyers. The person would like to lend the money out of kindness.
Expert:  Stuart J replied 15 days ago.

If this is towards the deposit, the lender will insist that it’s either the gift or that it’s not repayable during the term of the mortgage. That’s because they will not allow further borrowing which may prevent them paying the main mortgage.

You are going to have to have a solicitor anyway to deal with the purchase so you might as well get the solicitor to deal with this. You certainly need a loan agreement to lay down the terms of the lending and the payback.

A basic loan agreement should be sufficient to be frank. I have probably got one somewhere that you could use by filling in the blanks. I will have a look and I have, I will submit premium services proposal for you. It’s optional extra.

Ideally, to protect your friend, there should be a legal charge registered at the land registry. However some mortgage lenders will not allow that. It does protect your friend, not you.

Thank you for letting me assist you with your legal question. I am glad that I was able to help.

I am not certain whether that answers the question for you or not, but I am happy to answer any specific points arising from this.

It will be my pleasure to help you again either further with this or any future questions you have

Kind regards

Stuart

Expert:  Stuart J replied 15 days ago.

Can I help you any further with this?

It's my pleasure to help. I’m glad that I was able to help so far.

Thank you for trusting Just Answer with your legal problem.

I'm happy to clarify anything which is outstanding. Please don't hesitate to ask.

Kind regards

Stuart

Customer: replied 15 days ago.
Hi, when you mention ‘the lender’ for the deposit, do you mean any sort of Help to Buy scheme? And when you say they could insist that the deposit is not repayable during the term of the mortgage -
who is ‘they’ and does that mean the money my friend would loan me would have to be paid back to them before beginning a mortgage?
Sorry for not understanding!
Expert:  Stuart J replied 15 days ago.

I mean any lender. Usually the mortgage lender/building society.

“They” is the mortgage lender.

The mortgage lender will be concerned that they don’t get their mortgage paid if there is another lender in the wings shouting louder to get repaid and hence the friend is the lender in the wings and the building society lender will want him not to want to be repaid during the term of the building society mortgage. The same with banks and any other institutional lenders.

Customer: replied 15 days ago.
Ah I see, would the lenders need to know if I was repaying my friend back? It’s tricky really because paying the friend back on top of the mortgage makes the payments much higher initially, depending on terms.
Many thanks for your help! Perhaps I should win the lottery instead!
Expert:  Stuart J replied 15 days ago.

There is no way they could find out if you were paying your friend back. That’s between you and them but they would want confirmation that the friend would not pursue repayment. Some lenders go even further and want it to be made as a gift.

It's my pleasure to help. I’m glad that I was able to help so far. Thank you for trusting Just Answer with your legal problem. Can I help you any further with this? I'm happy to clarify anything which is outstanding. Please don't hesitate to ask. Kind regards Stuart

Expert:  Stuart J replied 15 days ago.

Hello again.

If you don’t have any further questions, I will mark this question thread as complete but don’t worry, the thread stays open if anything else crops up over the course of the next days weeks or months.

I’m glad that I was able to help.

Thank you for trusting Just Answer with your legal problem.

Kind regards

Stuart