borrowing down payment to children

[nnorell]

What is the name of your state? Arizona
I have agreed to borrow a 20% downpayment to my daughter and son-in-law for the puchase of their first home. We have both agreed that we should have this agreement in writing. They plan to either refinance the house within 3 years and at that time would pay back the money ...or at anytime that they would sell, I would recieve 20% of the proceeds. Is that enough to put in writing? Also, would that need to be a notarized document? Do you see any huge problems with this agreement? They are responsible and trustworthy, however I do want some protection. Thank you

Q: Do you see any huge problems with this agreement?

A: Yes, I $ee $everal thou$and problem$.


Get a real estate attorney to make sure YOU are protected.

[John Se]

Their lender will want a gift letter saying that the 20% you are giving them is not a loan. After the deal is closed then you can execute a promissory note between yourselves. Then i think you can get a deed of trust as a second lender against the property if you feel you really need that security. My parents would have just given me the money and say pay it back when/if you can, they never felt a need to hold it over my head.