How can I secure a loan to my son against his home in South Carolina?
A personal loan can be secured by some kind of collateral. When real estate is used as collateral, if the loan is not repaid according to the terms of the promissory note, the lender of the money can pursue repayment using the value of the property.
When making a secured loan, the lender will have the borrower sign a promissory note that states in part that the loan will be secured by an identified piece of real estate. This is the process when a home equity loan is secured.
At the same time, the borrower will sign a mortgage deed which grants the lender an interest in the borrower's property. The loan can be secured even if f the property is owned by more than one person (and that person is not a party to the loan).
However, it should be cautioned that in many states, a divorce proceeding will put a hold on either spouse's ability to encumber a marital asset. That means if the spouse does take out a loan (which would affect the ultimate value of the asset), the spouse who took out the loan could face consequences in the divorce court. Your son should review the scenario closely with his legal counsel before signing.
As the lender, after the borrower signs the note and mortgage, the lender must "perfect" the process by recording the mortgage on the local land records where the property is located.