Family loans- implications

eeetee

Hello, hoping for some initial advice. my sister has moved into my grandparents home, since they passed away, now owned jointly by my mother and aunt. they have secure funds to buy aunts half of property. Mother has suggested a repayment schedule to cover her half. I am concerned of future consequences of this, implications if they do not keep up with payments. also the effect it could have on their relationship. I think her next step is to get advice from solicitor but I hoped to hear from anyone who had a successful similar arrangement with family.

xylophone

Your mother owns this house as tenants-in-common with your aunt?

Your sister wishes to buy out the aunt's half with the help of a loan from your mother?

Your mother can have a solicitor draw up a loan agreement and take a charge on the property.

If your mother receives interest payments she will need to declare them to HMRC.

eeetee

Hi xylophone
not quite.
sister already has funds in place to buy aunts share.
mother has suggested repayment schedule over 25 yr to buy out her (mothers) share (as opposed to needing to find whole sum now . this is not a loan then?

Pixie5740

It's a private mortgage between your mother and sister. Your mum can sign her share of the equity over to your sister and place a charge on the property only to be removed when the mortgage is paid off.