Mortgage Loan ABC - Friends Don't Let Friends Loan Money:

Friends Don't Let Friends Loan Money

4 Tips to Avoid the Pitfalls of Loaning to your Best Friend

I'm sure that you heard the old adage never mix business with pleasure. Most people prefer to keep their personal and professional lives separate, particularly where money is involved. Poor business decisions or ventures can lead to a rupturing of a friendship and the same holds true in a money-lending situation. Many good friendships have been lost because money has been lent and then misspent or not repaid.

But what about situations when there is no one else to turn to? You're desperate for money and your best friend offers their assistance. Can you afford to turn him or her down? Or what about the reverse - one of your closet friends comes to you with a financial problem and asks for your assistance because

they have no other options? Would you feel right turning them away? How can you avoid falling into the pitfalls of mixing friendship and money as either the lender or the borrower? Here are a few tips on how to approach a loaning situation between friends.

Eliminate All Other Options

Before you accept money from a friend or offer money to a friend, make sure that there aren't any other options you can pursue. Maybe one bank has turned you down, but have you really tried all of them? Is there another money lending companies that will work for your situation? Have you cut back your expenses to the absolute minimum or are there some non-essential items that you can do without? One of the best things to do is sit down and figure out a monthly budget. Write down the amount of money you have coming in and then subtract only those things that are absolutely essential for your survival. You might find more money that you thought you had just because you took the time to map out your monthly spending. The most important things to keep in mind is that borrowing from friends should be your last option, not your first. If you can get it from someone or somewhere else, then you should.

Treat it Like the Business Arrangement it is

What most people fail to do is treat this kind of loan like the business arrangement it is. You must outline in writing the amount being borrowed, the time frame for repayment and the amount of interest (if any) that will be included in the repayment. If you do not have a solid agreement like this in place, it is far too easy to get complacent about the situation.

Be Wise in Your Spending After Borrowing Money from a Friend

This may seem like an obvious point, but you'd be surprised how much of a problem this can become. Most friends don't mind lending the money and helping someone out, but it can be very aggravating to believe that money is being misspent. Put yourself in the lender's position. Just say you lend money to your best friend, Sarah, to help her pay off her credit card debt. If after lending her the money, you see her spending money on non-essential items like cosmetics or shoes instead of increasing her payments back to you, wouldn't you be a little upset?

If you've borrowed money from anyone - be it a bank or a friend - your first priority is to pay that money back. There will still be plenty of time for life's little pleasures and luxuries once that debt is settled. And if your the lender, don't let your frustration build up - make your feelings heard and let your friend know in the nicest way possible that you need your money back as soon as they can spare it.

Pay it back!

No matter how long it takes, you need to pay the money back. If it takes longer than you anticipated, then it is important to talk to your friend and explain the circumstances. Most people will understand if there are good reasons for the delay.

If there is a rupture or end to the friendship before all the money is paid back, it is still important that all of the money be returned. There is no way to salvage the friendship or your good name if you do not settle your debts.

The Payoff of Student Loan Consolidation

Dont Come in Second when Shopping for Reasonable Second Mortgage Terms

When disaster strikes Find out your options BEFORE something happens

On the Road Again Advice about loans for RVs and other recreational vehicles

Kids in College Can Be a PLUS Parents Know your Education Funding Options

Mortgage Loan
◦ 5 Scams - Countdown of the most extreme
◦ A Lending Hand - Only Good Credit Need Apply
◦ A Risky Proposition - How You Score Matters
◦ APR, FICO, HELOC - The FAQ's on these Little Initials and More
◦ Asking the Right Questions before Signing a Loan
◦ Balloon Payments Full of Hot Air?
◦ Case in Point - Negotiating Mortgage Points before Signing Anything
◦ Closing the Deal: Plowing through the Mortgage Paperwork
◦ Crossing that Bridge Loan when you come to it
◦ Don't Come in Second when Shopping for Reasonable Second Mortgage Terms
◦ Don't Lose Your Shirt or Your Home - Keep an eye out for crooked mortgage companies
◦ Don't take it personally-What to do when you are turned down for a loan
◦ FICO: Your Personal Financial Score Card
◦ Friends Don't Let Friends Loan Money:
◦ FYI on PMI - General Information on Private mortgage insurance
◦ Give yourself a little Credit:
◦ Glutton for Punishment? Co-sign a Loan
◦ Go for Broker: A Mortgage Broker Can Pay Off for You
◦ Government Grown Loans - The Lowdown on FHA and VA Loans
◦ Highway robbery - How to avoid getting taken advantage of in the loan process
◦ House Rich and Cash Poor - Buying a home that you can afford
◦ How do you Rate? Credit Reports Tattletale on your Finances
◦ In a Fix: Unsurprising Mortgage Payments you can Count on
◦ Kids in College Can Be a PLUS - Parents, Know your Education Funding Options
◦ Lending a Hand: How to Help Family financially but not get taken advantage of
◦ Lying about loans - Legality of using loan money for something other than its purpose
◦ More house than you need? Shop around before signing
◦ Mortgages Can Be Taxing - What You Should Know about Closing Costs and Fees
◦ On the Road Again: Advice about loans for RVs and other recreational vehicles
◦ One size does not fit all - choosing the right loan for you
◦ Owning vs. Renting - The Big Debate
◦ Pay them off - The advantages of paying
◦ Payday Loans REALLY Make You Pay in the End!
◦ Pre-approved for a loan? Don't get your hopes up
◦ Ramifications of Refinancing
◦ Scam is a Four-Letter Word in the Mortgage Category
◦ Score High and Keep Interest Low - The Ins and Outs of Credit Scoring
◦ Shop 'til the Rates Drop - Looking for a Great Mortgage Interest Rate
◦ Speak the same language - Learn the lingo of loans
◦ Study your Options on Student Loans
◦ Take Note of the fine print on your mortgage papers
◦ The ABC's of Amortization
◦ The Lowdown on Loan Options
◦ The Mystery of Mortgages
◦ The Payoff of Student Loan Consolidation
◦ The Pros and Cons of Consolidation
◦ This Option may not cost you an ARM - Consider your Options with Adjustable Rate Mortgages
◦ Upside Down - Avoid Owing More on your Loan than the Value of your Car
◦ When disaster strikes - Find out your options BEFORE something happens
◦ Buying or Selling, is the Mortgage Your Only Option?
◦ Equity and Your Home, A Hidden Asset?
◦ Fannie Mae and the Home of Your Dreams
◦ Financial Planning and Interest Only Mortgages
◦ Government Approved Mortgage Loans
◦ Home Equity Lines of Credit
◦ How Does Fannie Mae Work?
◦ How Real Estate Drives the Interest Only Mortgage Market
◦ How to Shop for Low, Interest Only Mortgages
◦ Interest Only and Credit Card Debt
◦ Interest Only In Your Best Interest?
◦ Interest Only Mortgage versus Balloon Notes
◦ Interest Only Mortgages: A Risky Real Estate Move?
◦ Interest Only Mortgages and the LIBOR, What is it?
◦ Interest Only Mortgages and the Young Professional
◦ Interest Only Mortgages for the Wealthy Investor
◦ Is the 20% Down Requirement Still Alive?
◦ Is Your Credit Working Against Your Mortgage Options?
◦ Middle America Goes Upscale on Interest Only Options
◦ Mortgage Companies: Specialty Guys
◦ Mortgage Interest and Your Tax Liability
◦ Mortgage Products: The 15 FRM
◦ Mortgage Products: The 15 Year ARM
◦ Mortgage Products: The 20 FRM
◦ Mortgage Products: The 20 Year ARM
◦ Mortgage Products: The 30 FRM
◦ Mortgage Products: The 30 Year ARM
◦ Mortgage Products: The Adjustable Rate Mortgage

A Home Mortgage Loan Calculator Helps you Determine Affordability of a Home