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Buying home from a friend
IPonthemove
Posts: 4 Newbie
Any advice on how to consider the legalities of a 80% or 90% purchase with the current owner retaining a 10-20% share? Then review in say 5 years
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If your buying cash you have no problem, if you expect to get a mortgage doing that I cant see it being so easy0
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Never do business with friends or family0
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Who's going to be living there? How are you proposing to fund it?0
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Why is the current owner retaining ANY equity???0
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Speak to a solicitor about Tenants in Common. Each person with an interest in the property can be assigned a share according to the invested amount. This is reflected in the deeds at land registry and guarantees each partner their fair equity share of the house.
Consider that you will be unlikely to ever be able to sell your share of the house without the other persons consent, so if they refuse to sell their share to you or sell on to a third party in the future you will be stuck.It may sometimes seem like I can't spell, I can, I just can't type0 -
If you don't require a mortgage to fund 80% of the purchase then the current owner could lend you the remaining 20% (assuming they don't currently have a mortgage on the property) and put a charge against the property for the remaining amount. That would give you 100% ownership from the off and them some security for the loan. You having 100% ownership would prevent things from getting messy in the event of marriage, death or divorce further down the line.
Particularly from their point of view it's good to have an understanding of how and when the remaining 20% will be paid.0 -
Then they should register a charge against the property for the balance.IPonthemove wrote: »Willing to help us and not in need of all sale proceeds straight away0
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