Question: does this sound like a fair deal for me? Would it ever make sense to purchase a home on an interest free loan if I am not living in it and not getting any rental payments from it?
Essentially this boils down to my parents acting as a bank providing interest free loan repayable in installments over time. All this would be formulated through a deed of sale drawn up by a notaire to ensure it is legally watertight.
Parents: X, brother: Y me: Z
Y lives in the house for the foreseeable future.
Process: X sell' to Y AND Z for 240k (note Y and Z would negotiate how to deal with fees/tax = approx 20k; but as advantage of usage falls to Y this could be fully or proportionally absorbed by Y) and put in place an agreement of loan with following terms:
0% loan and repayment amounts and split as negotiated between X, Y & Z: For example purposes: Y repay 1,000 (2/3rds) and Z 500 (1/3rd) per month. 1,000+500 = repayment of 1,500/month
Therefore term of the loan becomes .....1,500 x 160 months = 13.33 years; Y (2/3) & Z (1/3) own a share of the flat each at term.
All value add on future sale to be retained by Y (2/3rd) and Z (1/3rd)
If house gets sold before end of 13.33 year term, say 100 months, Y retains 100k of the capital spent (the 1k payed month) + 66% of added value/loss of sale) and Z retains 50k + 33% of added value.
Note: the house is in France where houses have increased in value by 5-7% the last 20 years. Inflation does not have to be factored in as they're generously giving us an interest free/inflation free loan.
Would I be better off just keeping my money in stocks? How can I negotiate to make it more worth while for me? Could my brother pay me a rental payment of 1/3 of the true value of the rental? Or would getting him to pay for all taxes and construction fees make it more than worthwhile for me alone?
Thanks
Essentially this boils down to my parents acting as a bank providing interest free loan repayable in installments over time. All this would be formulated through a deed of sale drawn up by a notaire to ensure it is legally watertight.
Parents: X, brother: Y me: Z
Y lives in the house for the foreseeable future.
Process: X sell' to Y AND Z for 240k (note Y and Z would negotiate how to deal with fees/tax = approx 20k; but as advantage of usage falls to Y this could be fully or proportionally absorbed by Y) and put in place an agreement of loan with following terms:
0% loan and repayment amounts and split as negotiated between X, Y & Z: For example purposes: Y repay 1,000 (2/3rds) and Z 500 (1/3rd) per month. 1,000+500 = repayment of 1,500/month
Therefore term of the loan becomes .....1,500 x 160 months = 13.33 years; Y (2/3) & Z (1/3) own a share of the flat each at term.
All value add on future sale to be retained by Y (2/3rd) and Z (1/3rd)
If house gets sold before end of 13.33 year term, say 100 months, Y retains 100k of the capital spent (the 1k payed month) + 66% of added value/loss of sale) and Z retains 50k + 33% of added value.
Note: the house is in France where houses have increased in value by 5-7% the last 20 years. Inflation does not have to be factored in as they're generously giving us an interest free/inflation free loan.
Would I be better off just keeping my money in stocks? How can I negotiate to make it more worth while for me? Could my brother pay me a rental payment of 1/3 of the true value of the rental? Or would getting him to pay for all taxes and construction fees make it more than worthwhile for me alone?
Thanks