Buying a house from a family member - written agreement ?

AnotherJoe

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.

Why? You are paying her money. Why would she want you to have access to her bank account ? That makes no sense.
And what happens if she dies before it's signed over to you in 25 years ? Do you own a % of the house? Owe her beneficiaries money? Can they be bound by the terms of your deal after her death? What happens if you fall out? What happens if you stop paying? What happens if you fall into arrears? Or she goes into care and the council want to sell it?
This has Hammer House of Horrors written all over it.

Presumably you aren't eligible for a mortage hence thinking of doing this ? Or is there another reason?

xylophone

We were looking to gettin a isa bank acount between the 3 of us

This is not possible - Individual Savings Account.......

Mojisola

Cowelly121 wrote: »

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.

Cowelly121 wrote: »

at the end of the payments the plan is to sign the house over to us.

Better for her to sell you the house and you get the ownership in your name immediately - she takes out a charge on the house and you pay the debt down each month.

If she dies before you've cleared the debt, you will owe her estate the money - your arrangement will have say what happens if this arises - you may have to sell up to repay the debt.

xylophone

Yeah at the end of the payments the plan is to sign the house over to us.

Surely what is required is for the house to be transferred to you against a formal agreement acknowledging the deposit and agreeing the repayment schedule and any interest payable?

Your aunt would take a first charge on the property to protect her position (and that of her heir).

Presumably your aunt's will leaves her assets (which would include the loan repayments) to her daughter - her solicitor should advise on this point.

You would be well advised to take out insurance that would pay off the loan in the event of the death of you and/or your partner.

Another point has occurred to me - if this house is not your aunt's principal private residence, had CGT liability been considered?

This arrangement is "deferred consideration"?

da_rule

So she dies a month before your last payment. Her estate has the house plus all of the money you’ve paid her. Sounds like a win to me.

You need professional legal and financial advice before you touch this deal.

societys_child

All that's needed is a private mortgage. See a solicitor.

iamtati

You definitely need an agreement it will be a good solution for both sides. Also these way you will keep good relation with your relatives.