Family loan question

foxy-stoat

You should be gifting your son the deposit for a property they CAN afford with a mortgage - 15-20% or whatever - say its an early inheritance to your Son. That way you dont need to spend 100% of the purchase price and everyone knows where they stand.

Forget buying the house and loan agreements and coming up with unreasonable unenforceable clauses - if you want to help them and make it complicated then buy it and rent it to them and gift them the house after 30 years....assuming they will stay they that long or refund the rent payments.

Undecided12

Original post now corrected

John_Jones

hollie.weimeraner wrote: »

For all intents and purpose it is a gift. I understand legally I have no claim on it therefore it's not fraud as such a time they want to repay my gift then it's up to them.

But you said just up above that it was a loan, so yes, this is clearly fraud.

You seem to be mixing up what can easily be proven with what you have done, which makes no sense.

Candyapple

Undecided12 wrote: »

My son and fiance want to buy a house.

They cannot afford the mortgage repayments on a normal commercial mortgage.

So I have suggested that I lend the money to buy a house with the loan being repayable monthly over 30 years. I would take a charge over the house.

I want to help them and in order to keep the repayments down so that they can afford them I will not be charging interest

I am worried about what happens if they split up

I don't want to be financing them with a free of interest loan in this situation

My question is

Can I include a clause in the loan agreement saying that at any time I can give notice after which time the outstanding loan must be repaid to me in full?

Would this stand up in court?

Or would it be deemed an unreasonable clause?

Any other comments or observations?

Thanks

How much are you planning on lending them?

Will this money be used by them as a deposit?

How much is the house price that they are looking to purchase?

[Deleted User]

It's 300k, the full amount needed, with the son putting in 20k. No deposit, no commercial mortgage.

Explained in a duplicate post.

https://forums.moneysavingexpert.com/discussion/comment/74315646#Comment_74315646

foxy-stoat

Can I include a clause in the loan agreement saying that at any time I can give notice after which time the outstanding loan must be repaid to me in full?

You can say what you like in your agreement.

Would this stand up in court?

You mean would a Judge rule, Yes your son legally owns you the loan less any repayments and accepts that it must be repaid in full after a given notice period - Most probably if you both signed it after taking legal advice but it would be very unreasonable to assume that your Son had the ability to repay the loan after a given notice period, apart from a win on the lottery.

Or would it be deemed an unreasonable clause?

I believe that your Son's solicitor would deem this unreasonable, as would I, but I am not a Judge and this would need to be tested in a court. I dont think you can vary the terms of the loan in difference circumstances - ie its interest free if you dont split up but if you do I am going to charge you X% interest from day one - think thats a bit of a non-starter but good luck.

Any other comments or observations?

If you are trying to safe guard you enforcing a clause to call in a 6 figure debt incase your Son marries, has kids then after a time splits up and the Ex-Wife demands to stay in the house to keep the 1,2,3,4,5 children with a roof their heads - you will probably not get anywhere near getting your money back after spending out on legal fees - no Judge in the land will enforce an unreasonable clause that would land 1 woman and children on the street - you would have to evict them which will take 6-12 months then sell the property in order to get your money back.

Do report back once you work out what you are going to do to help your Son.