QUESTION
My sister asked me $25-$50k to buy a house for the downpayment & closing costs. I would be on the deed. Do I need promiss. note & lien?
Asked on May 06th, 2026 on Debtor and Creditor - Pennsylvania
More details to this question:
My sister, who is recently divorced is buying a house. She has $150k from the sale of her current house. She is buying a house for $250k. She mentioned the closing costs are $20k. She is asking to borrow $50k. I mentioned I can only lend $25k (our Mom is giving her the other $25k). She mentioned this $50k is for downpayment and closing costs. I don't know her mortgage yet. She is a bartender and doesn't make a lot of money but is getting $800 in alimony. I would be on deed of the house. I want to ensure I get my money back as $25k is a lot of money for me and I want to be clear that this is a loan not a gift. Do I need a promissory note and a deed of trust (lien)? Or what else should I consider?
1 ANSWER
CREDIT CARD COLLECTION DEFENSE Attorney serving Harrisburg, PA
Partner at
Law Office of Gregory M. Lane
Absolutely you need her to give you a promissory note and grant you a mortgage lien on the property. The amount you are loaning her should not be considered a gift because it is in excess of the $19000 annual gift tax excusion. So, if you do not set it up as a loan you could be hit with gift tax later on. What you could do, however, is structure it as a loan upfront but forgive a little every year which as long as the amount forgiven is less than the gif tax threshold you willnot be considered to be giving a taxable gift.
Answered on May 11th, 2026 at 4:16 AM