Buying property from family member without involving bank

B

Bobby79

Guest
Hi,

My partner and I have been renting his mother’s house for several years (she lives elsewhere). She has now suggested that my partner and I could buy half this house (we can afford to buy half, but not the whole house). We are thinking that it would be possible to avoid getting a bank mortgage and instead pay a deposit directly to his mother and then regular ‘mortgage’ payments also directly to her to pay off our half of the house.

Does anyone have experience of this kind of arrangement or have any suggestions? Obviously we would contact a real estate lawyer to formalise any arrangements made.

Thanks!
 
The home owner is effectively selling half of the home so she needs to make sure to pay the Capital Gains Tax (or UK equivalent) on that sale. Plus any annual income tax on the interest element of the loan if there is interest attached. Then as the buyer you need to make sure your name goes on the deeds as co-owner. And you need to consider Stamp Duty (or UK equivalent).
 
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