Question about parents house

xylophone

In effect your mother would be the mortgagee of the property.
A legally enforceable loan agreement with a charge on the property in your mother's favour could be arranged - you and your mother would be well advised to consult a solicitor.

You would also need to agree on whether the loan was to be interest free or if not, the rate of interest to be charged?

If interest were paid, your mother would need to declare it for tax purposes.

Your mother would also require you to take out insurance so that in the event of your death the loan would be repaid?

tim123456789

xylophone wrote: »

Your mother would also require you to take out insurance so that in the event of your death the loan would be repaid?

No she doesn't, she has a charge on the property which she would re-posess to pay off the loan (in exactly the same was as a bank would)

holly_hobby

Post 7 discusses this.

It isn't really a case of she WOULD require a charge but more a case of MAY - as this would be a private arrangement and she may choose not to have any such restrictions - although I would expect any legal advice to strongly recommend this to her.

Of course from the OPs point of view, if they have a family that they would wish to retain the property post their passing (if pre-deceasing Mum, and it is likely that Mum would not leave the property with the OPs suriving partner (if this wasn't a joint loan arrangement), then life cover (in trust for partner) at least cover the mge debt is essential.

Also effecting life cover on Mum (on life of another or under trust for the OPs benefit) may be prudent depending on the arrangements for any os mortgage that may be in existance if Mum pre-deceases the OP, and there are other beneficiaries to the estate.

This is a complex enquiry, and in reality a forum isn't the place to rely upon info given (given the legal ramifications of the OP getting it wrong). To that end, the OP and Mum need to consult with a solicitor and also ensure that wills are updated to reflect the arrangement.

Hope this helps

Holly

RAS

holly_hobby wrote: »

Not if the landlord is a connected person, which your Mum obv is.

Yes they could BUT they would have to pay the market rent and show that it was not a contrived tenancy. So mum would need gas certs, landlord's insurance and all the other stuff that normal lls have to do.

Plus mum would have to convince the Council that she would evict the tenant if they stopped paying the rent and rent would have to increase at intervals..

holly_hobby

Yes but which isn't likely TBH - which is what prompted my comment.

Holly