Conveyancing problem

lunch

Hi I am currently in the process of buying a house of my step mother. The house value is £160k , I am getting a mortgage of £112k and she has agreed to gift me the remaining £48k so my loan to value is below 75%. She would like something put in place so if I sell the property in the future she will receive 25% the sale proceeds. I have spoken to my lender and they have said this not affect the mortgage.

I would like to know how do we go about setting this up & what is the cheapest way :huh:

Richard_Webster

she has agreed to gift me the remaining £48k

She would like something put in place so if I sell the property in the future she will receive 25% the sale proceeds

These statements are inconsistent - it is either a gift or a loan - it can't be both - which is it?

Muhasib

on the figures given then the lender is correct , are you wanting a formal 2nd charge over the property?

what happens if you need to sell should the value is 10% lower ? - at that point your step mother would receive £36000 but you may not get this from the proceeds as the lender would still need to have its mortgage repaid first.

I would think the lender means by 'not affect the mortgage' that they will get their 1st charge over the property anyway and when you come to sell anything remaining is up to you what happens to it. Your stepmother's claim cannot take precedence over the lender's interest.