Buying a house from a family member - written agreement ?

Cowelly121

Hi I am buying a house from a family member however I am not getting a mortgage. Me and my partner plan to give my aunty a diposit (around 10% of the property worth), then pay the rest in month payments until it’s payed off.

Can I get some sort of agreement written up?
Has anyone got any experience of doing this before?
Or is there any complications anyone knows about?
Thanks Ryan

AnotherJoe

There's more complications than you can shake a stick at.
See a solicitor.

DigForVictory

Spin it round - would you, in your later years, sell a house to a nephew for a modest lump sum & their word they'll pay the monthly instalments that you may depend on for your own bills, food, care etc?

AnotherJoe's advice is spot on. Get legal advice & be prepared to pay for it as you are about to start tap-dancing through a minefield otherwise.

p00hsticks

DigForVictory wrote: »

Spin it round - would you, in your later years, sell a house to a nephew for a modest lump sum & their word they'll pay the monthly instalments that you may depend on for your own bills, food, care etc?

Of course it all depends on what point in the transaction the transfer of title deeds from one name to another takes place - if it's not until the complete amount is paid the aunt's laughing. Another reason why the op needs a solicitor.

Money_maker

Where is aunty going to live?

DoaM

Buying a property from a family member should be no different (price notwithstanding) to buying from a stranger (mortgage or no mortgage) - treat it exactly the same.

xylophone

In effect, your aunt will become your mortgagee.

There should be a formal legal agreement and your aunt should take a first charge on the property to protect her position.


Your deposit should be properly documented as should the frequency of repayments and any interest due or deferred.

You and your aunt should consult a solicitor.

Are you and your partner taking out insurance to cover repayment in the event of death before the loan is repaid?

AnotherJoe

xylophone wrote: »

In effect, your aunt will become your mortgagee.

There should be a formal legal agreement and your aunt should take a first charge on the property to protect her position.


Your deposit should be properly documented as should the frequency of repayments and any interest due or deferred.

You and your aunt should consult a solicitor.

Are you and your partner taking out insurance to cover repayment in the event of death before the loan is repaid?

And what if Auntie dies first ? More likely. That needs to be catered for.

Cowelly121

Yeah at the end of the payments the plan is to sign the house over to us. We were looking to gettin a isa bank acount between the 3 of us until the final payment is payed. If my aunty dies the money would go to her daughter.

chunkytfg

Cowelly121 wrote: »

Yeah at the end of the payments the plan is to sign the house over to us. We were looking to gettin a isa bank acount between the 3 of us until the final payment is payed. If my aunty dies the money would go to her daughter.

Plus the house and all of her other assets assuming no other dependants and no will.

And at the end of it you'd be out of pocket, own no house and be quite a bit older!

Linton

Cowelly121 wrote: »

Yeah at the end of the payments the plan is to sign the house over to us. We were looking to gettin a isa bank acount between the 3 of us until the final payment is payed. If my aunty dies the money would go to her daughter.

If you are paying Aunty while she still owns the house dont you become her tenant with all that entails? And she should pay income tax on the "rent".

Do it properly!


PS An ISA can only be owned by one person.