How do I document a loan made by me to my Mother to assist her in buying a property.?

I wish to lend my mother c£20,000 to assist with a property costing £275,000. I wish it to be secured by a mortgage on the property, not because I don't trust my mother, but so that on death (she is 77) the mortgage will be repaid from the estate and that share of the house will not become part of the Inheritance Tax trap.


I would prefer not to involve a solicitor in drawing up the mortgage deed and would happily use a form available over the internet, if such a thing exists. My aversion to using a solicitor stems from the fact that it will have to be independent of the solicitor she is using for her sale and purchase and just adds to the already considerable costs of the move.


How do I go about registering the charge and does this have to be done at the time the money is lent? That is on purchase.


If I cannot resolve this then I will lend the money unsecured but envisage problems with the tax authorities when I reduce the value of the estate by £20,000 +interest.


Many thanks.

How do I document a loan made by me to my Mother to assist her in buying a property.?
I am in the U.S., so I am not familiar with procedures there. However, I know that where I live, some city, county and state officials do not recognize some forms purchased from the internet. They often have certain requirements that most online forms do not fulfill. If you go the online route, check with the appropriate officials to make sure that the form you use will be recognized.





Personally, I would use a solicitor. Yes, the fees are a pain, but better a small pain now than a big pain later. Besides, that type of thing is pretty inexpensive here. My in-laws loaned us the cash to purchase our house outright from the mortgage company. I believe the lawyer costs were about $500.00 and the paperwork took less than 30 mins. The lawyer also added in some terms and conditions that the available, recognized online forms did not mention. It gave us protection in case of the death of one or both my husbands parents. The lawyer also thought of things that we missed to help protect the parents, like adding a clause to make sure we keep the property insured. Touches like that make a lawyer very much worth the expense.
Reply:Have a solicitor draw it up. Not doing so is downright foolish. Of course you'll have to use a different solicitor than the one who is doing the conveyancing!





The solicitor's bill will be much less than Inland Revenue's if you muck it up!
Reply:i think that the below website will help you to find the right solution
Reply:i think you are trying something dodgy here and you will get caught and will be convicted of fraud, no bank will give a 77 year old women a mortgage unless she has a full time job cos they know that she cannot pay it back, stop trying to rip the system for your own personal profit that is a s in and you will go to hell and live eternity as satins b iatch
Reply:I would think that spending a couple hundred pounds with an attorney would be money well spent.





What happens if you do it wrong? Lose all your money to inheritance tax? How much more could that cost?





Just build the cost of the attorney into the loan.
Reply:You can get a form for a simple note evidencing a debt on the internet. Its not a big deal. Simply specify the amount and the terms (rate of interest, when due, etc.).





If the money is lent, there will be a valid debt of the estate evidenced by the note whether you secure the note by a lien on the property or not. Having the security of the property protects you in the event the estate has unsecured creditors in excess of other assets of the estate. But assuming the inheritance tax applies to the net estate (after payment of creditors), there is no estate tax penalty of making the loan on an unsecured basis.





To record the lien, you typically have to file the mortgage instrument with the local recording official,and pay a small fee. this puts other creditors on notice of the debt.