Hi all, we had an uncle help us out buy a house a few months ago by lending some money to help with the deposit. One of the conditions from the bank to allow the loan was that all parties (Me, my wife, and her uncle(lender)) sign a "Deed of acknowledgement of debt". This document was provided by the bank and we just had to sign them. Its pretty short, and below is a copy/paste of what the "Deed of acknowledgement of debt" contains.
The lender has advanced to the borrower/s the sum of $xxxx. Some of the advance will be used by the borrower/s to purchase a property.
This is a record that the borrower/s acknowledges this advance. The borrower/s agree to repay the advance if the property is sold.
The lender makes this advance interest free with no repayments and will not be pacing a mortgage against the title.
Fast forward 2 months later, we are now living in this new house, the uncle now comes with a new contract for us to sign...which effectively states (amongst other demands..e.g. we can no longer take out any other loan without his approval), that within a year, we will start paying him back his money. His contract will force us to give him monthly spending budges, so he can use this to decide how much he would take from us as repayments...We have not signed anything here yet, as we told him we would need some legal help before signing anything.
We have always acknowledged that his money was a loan that would at some point have to be paid...but we were agreeing more with the Banks Deed of acknowledgement of debt, that this can only be replayed once we sell the house in a few years, which we have every intention of doing.
Question 1: Is the uncle's new contract legal? the Deed of acknowledgement of debt clearly says that there will be no repayments nor second mortgage.
Question 2: If we sign his new contract and start paying him money, will this break the Deed of acknowledgement of debt, and thus...would this cause the bank to default our home loan?
Thank you!
[link] [comments]
source https://www.reddit.com/r/RealEstate/comments/ut0i9t/deed_of_acknowledgement_of_debt/
Comments
Post a Comment