house purchase: borrowing money from family - contract options ?

nomadonkey

I’m purchasing a property with 50% deposit, the remainder 50% is coming from family as a short term loan until I remortgage in a year.

They want a guarantee that either I'll remortgage in a year or they can get the money back by forcing a sale.

Is this possible? What kind of contract needs to be drawn up? And what would be the process for them to reclaim their money. I need to reassure them its straightforward.

Alternatively, they've suggested joint ownership, but I'm not keen on them being on the title deeds. Mainly because I can't find a way where I can guarantee they'll sell back to me at cost.

My conveyancing solicitor is pretty clueless on how to deal with this situation, so really need specialist advice.

<sebb>

nomadonkey wrote: »

My conveyancing solicitor is pretty clueless on how to deal with this situation, so really need specialist advice.

When you'd rather rely on the specialist advice from an Internet forum than your own solicitor it's a pretty big sign that you need a new solicitor!

Your mortgage lender is unlikely to accept a loan as a source of deposit.

BitterAndTwisted

The OP is not financing the purchase with a loan as deposit. They have 50% in cash for the purchase and the balance is being provided by family as a loan.

OP: why do you need that 50% of the purchase-price as a loan? Why not just raise a mortgage for the 50% you need now?

In any case, any decent solicitor should be able to draw up an agreement for you.

nomadonkey

<sebb> wrote: »

When you'd rather rely on the specialist advice from an Internet forum than your own solicitor it's a pretty big sign that you need a new solicitor!

Your mortgage lender is unlikely to accept a loan as a source of deposit.

Yes, I've just drafted an email to my solicitor asking him to provide the requested advice or terminate our conveyancing agreement.

The only problem is finding a solicitor competent enough to provide detailed advice of the options available in what is, a slightly unusual situation.

The deposit is from the sale of my house, and is not a loan.

nomadonkey

BitterAndTwisted wrote: »

The OP is not financing the purchase with a loan as deposit. They have 50% in cash for the purchase and the balance is being provided by family as a loan.

OP: why do you need that 50% of the purchase-price as a loan? Why not just raise a mortgage for the 50% you need now?

In any case, any decent solicitor should be able to draw up an agreement for you.

I'm having problems getting a mortgage at present as I'm not in employment. I will be in employment within a few months. The property was purchased at auction, at a very favourable price.

nomadonkey

How do I find a decent solicitor who can advise me of the options I have available in relation to trust deeds, charges and title deeds with clauses.

And help draw up something suitable and answer any questions the family may have in relation to getting their money back. Most of the solicitors I've spoken to seem fairly incompetent.

zzzLazyDaisy

This is not a particularly unusual or complicated situation and I am very surprised that your solicitor is unable to deal with this. Are you using an online conveyancing company, or a local firm of solicitors?

You should be able to walk into any decent sized solicitor's office which has a property department and get this done without too much hassle (though the additional documentation will probably cost you, and your relatives who are loaning you the money will probably need to obtain their own independent legal advice, since there is a clear conflict of interest).

Or you can wait another few months until you are in a position to obtain a mortgage from a high street lender in the normal way.

nomadonkey

zzzLazyDaisy wrote: »

This is not a particularly unusual or complicated situation and I am very surprised that your solicitor is unable to deal with this. Are you using an online conveyancing company, or a local firm of solicitors?

You should be able to walk into any decent sized solicitor's office which has a property department and get this done without too much hassle (though the additional documentation will probably cost you, and your relatives who are loaning you the money will probably need to obtain their own independent legal advice, since there is a clear conflict of interest).

It's a high street solicitor. I bought the property at auction, so must complete.

xylophone

In effect your relative is acting as mortgagee? Like any mortgagee he takes a legal charge on the property? He should take the advice of his own solicitor who should liaise with yours?

nomadonkey

xylophone wrote: »

In effect your relative is acting as mortgagee? Like any mortgagee he takes a legal charge on the property? He should take the advice of his own solicitor who should liaise with yours?

Yes, but family member wants something more secure then a charge. Admittedly, they're being difficult.

Thrugelmir

nomadonkey wrote: »

How do I find a decent solicitor who can advise me of the options I have available in relation to trust deeds, charges and title deeds with clauses.

And help draw up something suitable and answer any questions the family may have in relation to getting their money back. Most of the solicitors I've spoken to seem fairly incompetent.

As you are being lent the money. Then it's the other party that needs to draft the "contract". Your solicitor can then advise you on the matter in an independent manner.