I am buying a house Mother is paying downpymt with monies to be returned if I sell house what should promissory note say

Asked on June 30, 2009 under Real Estate Law, Arkansas

Answers:

J.M.A., Member in Good Standing of the Connecticut Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

I am a lawyer in CT and practice in this area of the law.  I suggest that you NOT write the promissory note your self.  You can simply give your mother a mortgage on the property for the amount of the downpayment.  I presume that she does not care about interest on here money.  If she wants to try to make some money on the deal, then you can set up a limited liability company to own the property and you can both be members and when the property sells, your mom will get back her money first and then what ever is left over, you two can split. plus, you can possibly save your first time home buyer status to later on in life.  What happens if the house does not make any money when it sells?  is your mom going to want you to pay her back?  I presume not, but have to ask anyway.  You need to go see a lawyer.  This may be as simple as giving a mortgage to your mom - however, there are several complexities that could arise which is why you need to see a lawyer.


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