Lending money...

Either go jointly into business with him and share the risk (and reward) or tell him to do what other people do and approach a bank. Don't try an *be* a bank though!

In message , Fred writes

Im not sure what you mean but if you intend to lend money secured by a mortgage over property then 'yes'.

Yes. Mainstream banks want to have a 1st mortgage. If your mortgage is already in place then you would have priority over the bank (which is good for you), but this means the bank's charge is now a 2nd charge and they dont like being 2nd, especially if the 1st charge is to a friend with a hybrid mortgage which may escalate to such an extent that the 2nd charge is worthless. As a general rule banks value a 2nd charge by taking 2/3rds of the property value from which they deduct the 1st charge and the result is what they are prepared to lend.

This would make you a joint owner and possible a joint debtor.

Unless you want to be an active partner in the new business I would walk away form this completely. It will end in tears, sleepless nights, arguments, rows, etc.,,,,

Why not?

Be very carefull with this, personnally I would not lend him the money based on my past experience. I lent (what was a very good friend at the time) money about 6 years ago, not an enormous amount now but at the time of lending was 2 and a half months salary, think original balance was 2500 or thereabouts. Several years down the line and no payments for what must be

2.5 years, I am still owed 1300. Short of going round and breaking legs (bit of Wing Chun practice) which would make me feel a whole lot better, I'm a bit stuck.

Gav

I`d say either go into business with him, give him the money or walk away. NEVER lend a friend money - you often lose both the friend and the money.