First time here, so please be gentle!
I am thinking of buying a home, and have enough steady income to comfortably afford the monthly payment on the loan. However, I will need help with the down payment. One of my family members has suggested this offer:
- He pays the full down payment, which will be up to 30% of the home price. The exact percentage depends upon the price of the house I buy, but will be close to 30%.
- It will be a loan, and I don't need to pay anything to him for 5-7 years.
- After that period, assuming we sell the home, I give him the amount of the loan plus 50% of any profits / losses from the sale of the house.
- If I don't sell the home, we will take the then current value of the house, and add 50% of the profit / loss to the loan amount, which I would then owe him (to be paid at an interest if I don't have that money at that time).
I am very close to the said family member and I trust him, but I wanted to ask the community if this makes sense financially / practically.
Please let me know if you need more details, or if this question is not appropriate here.