I'm going through a divorce and am downsizing to a new house. My parents will be loaning me the money to buy the house. We plan to use the IRS minimum interest rate so that it won't be considered a gift and do everything above board. I'm the finance nerd of the family, so I'll be keeping up with the amortization, tax documents each year to report interest, etc. When my current "married" house sells, I'll be able to pay back about 1/3 of the loan.
The lawyer who's doing the closing will draw up official papers for the family loan for $500. Should I have him do that? Is it worth it? Is there a cheaper alternative, like drafting an agreement ourselves and getting it notarized, or is that risky in any way?
Background info that may be useful:
--lawyer will be preparing a free trader agreement so that ex-husband has no ownership in the new house; also, ex-husband is not malicious at all, so I have no worries about issues with him
--my relationship with my parents and sister is totally free of drama; we all get along; we all trust each other 100%; we don't foresee any issues stemming from this loan
--if there are drama issues with family, I can easily get a loan and repay parents once big house is sold
Thanks for any insight you can offer!