Loaning money to brother

[lizwizz]

This one is a bit complicated, but I'll try and be brief. My brother and his wife are separating, she is buying a house in Scotland and wants my brother to borrow �50,000 from the bank so that she can remove her name from their current home - buy her out effectively. The problem is, he is on a very low income, only about �10,000 a year and couldn't possibly afford to repay this kind of loan. The bank will probably lend it to him though as there is so much equity in the property. His wife wants us to lend him money, but we don't have that kind of money either. The only thing we can think of is if our mother lends him the money, which she does have. This is where it gets even more complicated as I and my sister have power of attorney for mum. Though she would understand if we explained it simply to her, there are so many what ifs, ie if she needs it to go into a home etc. I don't think he would ever be in a position to repay the money. His wife is committed to buying her property as it is the Scottish system, but we worry about our brother as he has a history of depression anyway. Can anyone see a way out of this mess? I also don't feel that comfortable lending him mum's money as we would not necessarily be acting in our mother's interests.

[Loosehead]

The simplest way is to sell the house and divide the proceeds. Any other solution involves unsustainable debt as far as I can see.

[funnywebsite]

Ditto, I was just about to say the same thing. Sell the house and split the profit. It's the most sensible they can both do.

He shouldn't have to borrow money to give her an easy way out.

[lizwizz]

Thought of that one. He wouldn't be able to buy even a flat in his home city for that money. He tried renting a pokey flat but he couldn't even afford that.

[El D]

Just to clarify, are you sure that the wife has a �50k stake in the property? How did he afford the house in the first place?

[WendyS]

I really don't think it's an honourable thing to expect your mother to help fund your brother's divorce. If you and your sister have power of attorney for her, it's your legal duty to look after her best interests, and that includes protecting her savings for her own use. Loaning money to somebody, even if it's another family member, who is not in a position to repay it, is not a responsible use of power of attorney. Your mother may need it one day for her old age. Tough though it is, the only solution seems to be selling the property and splitting the proceeds.

[lizwizz]

El D- they bought it many years ago when property was very cheap, and they had a joint income. Fully agree with Wendy S, but feel this is what my sister in law has been pressurising us to do, using emotional blackmail as her tool.
We have concluded that the house will have to be sold too. Thanks for all your advice.