Securing significant loan to purchase property-loan from father to son and daughter in law

[mf1]

Thoughts?

A client wishes to lend 80% of the purchase price to his son and daughter in law. They will repay him with interest over 20 years - calculated on the basis of 1% above current deposit rates.

Father will declare the interest. The loan will be secured by way of a charge on the property and there will be a formal agreement to lend ( by her) and to borrow and repay (by them)

Is this possible or does it fall foul of money lending / consumer credit legislation?

mf

 

[Gordon Gekko]

Does he want to be repaid, mf1?

And does he want to be paid interest?

 

[mf1]

Does he want to be repaid, mf1?

And does he want to be paid interest?

Yes, it is a loan not a gift and he wants to be repaid, with interest

I want the client to be able to enforce the mortgage - in the event of fall out!

mf

 

[Gordon Gekko]

Yes, it is a loan not a gift and he wants to be repaid, with interest

I want the client to be able to enforce the mortgage - in the event of fall out!

mf

Sorry, but I don't know the answer to your question(s). I suspect that it's fine based on what I've seen in the past, but I've never seen such an arrangement turn nasty.