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How can we make our 'mortgage' official?
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purpleapp
Posts: 11 Forumite
My parents have lent me money for my house. It is less than 50% of the value of the house. There is no other kind of mortgage on it.
I am leaving the country for a couple of years so will be renting the house out. My parents have agreed to maintain the loan but we want to make it more mortgage like with a close to marketinterest rate rate.
For tax purposes I need to be able to prove how much interest I am paying, this is usually done through obtaining a statement from your mortgage company - I won't have one - is there a way we can do this easily?
We will also need to sort this so that should the worst happen to me, my parents will be paid the amount I owe them at that time, I intend to make some overpayments too so this needs to be tracked somehow. I have worked everything out on spreadsheets but it needs to be official enough to protect my parents' interests. How could we do this?
Thank you for any help
I am leaving the country for a couple of years so will be renting the house out. My parents have agreed to maintain the loan but we want to make it more mortgage like with a close to marketinterest rate rate.
For tax purposes I need to be able to prove how much interest I am paying, this is usually done through obtaining a statement from your mortgage company - I won't have one - is there a way we can do this easily?
We will also need to sort this so that should the worst happen to me, my parents will be paid the amount I owe them at that time, I intend to make some overpayments too so this needs to be tracked somehow. I have worked everything out on spreadsheets but it needs to be official enough to protect my parents' interests. How could we do this?
Thank you for any help
0
Comments
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Speak to a solicitor and have an agreement drawn up.
While you are offsetting the interest on the loan against rent. Your parents will need to declare it. So I assume that this arrangement has been in place for a while. Have your parents previously declared the interest on their tax returns?0 -
Yeah, my parents have already declared. It is how we can track how much we still owe them. I will always know the amount, as will my parents, but should I no longer be around, how will they prove how much my estate owes them?
Would prefer this to be in a nice clean cut way so there would be no hassle for them.0 -
Then have the agreement drawn up in a simple manner. The transactions showing interest calculations and payments can be then recorded on a spreadsheet. I imagine it'll be you that maintains this. So give your parents a hard copy every 6 months for there records.
To secure the debt they can secure a charge on your property.
Other options are also available as well. A solicitor can advise you best when they have all your personal information to hand.0
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