How do we handle a personal loan for real estate? 7 Answers as of May 17, 2011We found a fixer upper for our 19 yr. old daughter. The seller is asking 15,000 (the title is clear and their are no taxes due). A elderly friend of ours is loaning us the 15,000 plus 10,000 to fix it up at 7% interest for 10 yrs. our friend has a revocable living trust and wants this made part of the trust. They are making us one check for the 25,000. Should we just close on the house with the seller and make a second contract with the friend for the 25,000 and put the property up as collateral? Or how should we handle this?
Burnham & Associates | Stephanie K. Burnham
This answer to this question is going to be based on weighing both your needs and your friends' goals in loaning this money. You can close in advance and then issue your friend a mortgage, a secured loan, or just a personal loan. However, if you friend wants the house to be owned by the Trust will a rent-to-own agreement or other security, then you should have this done at closing to avoid extra transfer taxes and potential costs.
Answer Applies to: New Hampshire
Theodore W. Robinson, P.C. | Theodore W. Robinson
I think the best way to record the loan is with a Mortgage on the property so that when it is sold, the lender will be paid off and to be sure it will get done, a mortgage will be recorded on the property. However, see an attorney about the matter.
Answer Applies to: New York
The Davies Law Firm, P.A. | Robert F. Davies, Esq.
You will want to get a lawyer to look at this for you. and a fixer upper for $15,000? this is too good to be true, it sounds like. I would need a lot more information to assist you. Give me a call, make an appointment to come see me, and let's get moving on this for you. No charge for the first office visit. I know people worry about how expensive a lawyer is, so I am careful to be as inexpensive as I can for my clients. Before you spend a dime, you will know how much this is likely to be.
Answer Applies to: New Jersey
Law Offices of Timothy G. Kearney, LLC | Timothy G. Kearney
It depends on what the "lender" wants. If I was representing the person lending the money I would require that your daughter (or you if you are taking title) sign a promissory note secured by a mortgage on the property.
Answer Applies to: Connecticut