Mortgage from the in Laws - What should be in the Agreement

[Airtight]

The simplest solution has already been stated. You just take out a regular repayment mortgage and if your wife's folks really want to help they can just gift the 40k to her and let her pay it off the mortgage. Risk to everyone is low.

The sbove solution leaves your wife's parents completely at the mercy of a court should you stop paying them back and seeing as it'll be a family home and the loan cannot be secured on it like a bank secures their mortgages against the property, there's not much (no) chance of your wife's folks getting possession back if you decide not to repay them.

The main benefit of have my wifes parent involved isn't only for the 40k thats coming regardless, its for the interest, its a fraction of what the bank would charge.

 

[j26]

I'll ask again - are they licenced to charge interest? If not the interest provisions might have to be 'informal' for your alternate suggestion to work.

The loan can be secured on the property by way of a charge, but a deed of charge would have to be drawn up and executed.

 

[Bronte]

The main benefit of have my wifes parent involved isn't only for the 40k thats coming regardless, its for the interest, its a fraction of what the bank would charge.

Can you give us the percentage? I imagine if it's way below normal rates the revenue will want to claw back some of that in the same way they do for bank staff who receive preferential loans rates.

Do you yourself see anything bad about getting a loan from your inlaws?

 

[Airtight]

.

"I'll ask again - are they licenced to charge interest?"

Its purely a domestic arrangement, so the answer is no.

"If not the interest provisions might have to be 'informal' for your alternate suggestion to work."

Why so?

"The loan can be secured on the property by way of a charge, but a deed of charge would have to be drawn up and executed"

How would we go about doing this? It that a similar system to the way banks secure mortgages?

 

[Airtight]

Can you give us the percentage? I imagine if it's way below normal rates the revenue will want to claw back some of that in the same way they do for bank staff who receive preferential loans rates.

Do you yourself see anything bad about getting a loan from your inlaws?

Its not actually interest, its a 10k lump sum (peanuts in terms of what it might cost), its more like a fee for the loan.

 

[j26]

Why so?


How would we go about doing this? It that a similar system to the way banks secure mortgages?

1. Because I believe it is illegal to lend money and charge interest unless you are licenced as a money lender. At best the in-laws could have serious trouble enforcing their security (if it came to that), because the agreement may not be legal.

2. Pretty much the same. It's a deed of charge, which is similar to a mortgage deed.