How do I loan my son a mortgage

lynnangela

My husband and I are retired and living abroad. we are about to sell our house in the UK and buy a smaller one with our son as a one third owner.


Im pretty sure he wont get a mortgage via the usual routes, so we want to lend him somewhere in the region of 80k to buy one third of the new house with us. The benefit for us is that our son gets on the property ladder, he will be living at home looking after the house and it releases one third of the value back to us in the form of monthly repayments from our son.


How do we go about getting the contract drawn up so that it is clear this is a loan and not a gift, and also as it is a loan we wont want to be taxed on the monthly repayments .


Any ideas?

lynnangela

I should have mentioned that this will be an interest free loan

Thrugelmir

There's no reason why your son cannot pay you a monthly sum and in exchange receive a % of the property. You'll need to speak to a solicitor and have a contract drawn up. As there'll be a number of scenarios that will need to be covered.

Who pays for the maintenance and upkeep though?

What happens if your son decides to move on and wishes to release his share of the equity.

There's much that needs to be thought through.