From: John Boyle 
Newsgroups: uk.finance
Subject: Re: Lending money...
Date: Mon, 18 Sep 2006 22:00:03 +0100

In message <450ef8c9$0$550$ed2619ec@ptn-nntp-reader03.plus.net>, Fred 
 writes
>A life long friend wants to borrow some money for a business venture?
>I'm up for help him but would like some degree of guarantee.
>
>Is it possible to secure a private person-to-person loan on a property?

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

>If yes how much does it complicate the bank mortgage and/or any future
>remortgage?

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.


>Should I just offer to buy a fraction of the business premises instead?

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.,,,,
-- 
John Boyle