My friend is thinking about borrowing money from her b/f to help make a downpayment on a house she wants to

Asked by Kristin, New Jersey Thu Nov 29, 2007

buy, they would both be living there, but she isn't putting his name on any of the paperwork. And obviously, they are not married. I am advising against this. What do you suggest? Isn't this risky?

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8
John, Home Buyer, USA, Mobile, AL
Fri Feb 1, 2008
I think if both parties have mutual trust all they need is a system to keep the track of the money borrowed/loaned. I use tabtally.com (see website link), as I sometime loan money to friends to pay for their college tuition.
Web Reference:  http://www.tabtally.com
0 votes
Phil Fowler, Agent, Brandon, FL
Fri Nov 30, 2007
Good Advice Kristin. You would be surprised how quickly a relationship can break up ..... over money.

If she has to borrow money for the down payment, can she really afford the home?
Web Reference:  http://www.PhilFowler.com
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Paul B. Perez, , Austin, TX
Fri Nov 30, 2007
You are advising your friend not accept free money? What kind of a friend are you? If the chump wants to lend her the money then let him. I wouldn't lend the money to my GF unless my name was on the title and vice versa. Also something to think about is even if she is gifted the money, (or not and its loaned which is illegal only when loan companies find out about it) depending on the community laws in the state; as long as he moves in with her and lives for over a year, he can't just get the boot and be screwed, he can get half! As long as he can prove he pays half.
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Dawn Benedic…, , Shrewsbury, NJ
Fri Nov 30, 2007
The biggest risk is to the boyfriend who is lending her the money. She owns the home in her name only and I am assuming thats the way she wants it. Of course, if she is unable to pay her mortgage it will only impact her credit so she should be sure that she can manage the monthly payment on her own should she need to. Also, she would need to have a gift letter from the boyfriend which again is a risk for him because by signing that letter he is stating that this money is not a loan but a gift.
Dawn Benedickson, Aurora Financial Group, 499 Broad St. Shrewsbury, NJ. If you would like a free consultation you can reach me on my cell at 732-259-6077.
0 votes
Lorie Gould, Agent, Duluth, GA
Thu Nov 29, 2007
Most loan programs if not all do not allow for down payment to be borrowed; therefore, she would not want a written agreement because she would have to then lie at closing. Chances are he will need to provide her with a gift letter to explain the funds. She does not want to committ any fraud with obtaining her loan!
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Jeanne & Jul…, Agent, Hyannis, MA
Thu Nov 29, 2007
I'd go for it it I were your friend. Perhaps they can have a written agreement that she would pay him back within "X" number opf years in the event that it didn't work out. Unless he wanted to gift it to her. If he has the money and is willing to lend, why not? He can decide how he chooses to spend his money.
Check out properties for FREE on my website, focusing on Cape Cod. www. JeanSOLDMyhouse.com
Regards, Jeanne Durgin
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Francesca Pa…, , Monmouth Cty NJ
Thu Nov 29, 2007
I'm no lawyer, but HE would be a fool to loan it to her! I would have to agree with you on this from a personal perspective.

There remain some loan programs available that can help here. Email me and I will give you some LOCAL NJ mortgage contacts. No sales pitch. Email: openingdoors@comcast.net
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Lorie Gould, Agent, Duluth, GA
Thu Nov 29, 2007
Based on your question. The B/F is taking on more of a risk than your friend because she is getting the downpayment and she is buying the home. The B/F if not on loan or title so if he gets to boot there is nothing he can do. Down payment monies cannot be borrowed (they can only be gifted); therefore, he would be out of that money as well.

If your friend is depending on him paying a portion of the mortgage then she is risking a financial crisis if he were to move out.

It is great to be a good friend and express your concerns. Many unmarried couples live together these days and purchase property together. If he were your friend... I would probably be more concerned about him.
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