Private loan from family

[Colin Potter]

My partner and I are preparing to make a cash offer on a home funded by our own cash partnered with a private loan from family. We've drafted our promissory note, have the funds ready to move, but I'm not finding any information on the web regarding the proper place to have the funds when the purchase is made. Should our private loan come straight from the family savings account it's in to pay towards the house? Or, should my partner's cash, my own, and the private loan all be transferred into a separate account before making the payment on the house? Are there any tax traps or other challenges we could be setting ourselves up for by doing this one way or the other? Any relevant information is appreciated!

We currently do not have an LLC if that affects any answers. Both my partner and my own name will be on the title.

[Saravanan Saravanan]

@Colin Potter

The title company some times takes bank certified funds / cashiers check upto certain limit.  Over that they would want to be wired.  To avoid costs; funds from your side can go as one official bank check or wire to the title company.

Your private lender shoud give funds directly to title company who is handling the closing.  The title company should provide lender's policy to them.  The title company should record mortgage and you sign note to go with that.  The lender technically should retain the original note.  Have title company to record mortgage and sign mortgage note during that time.  

Have property insurance and have the private lender as lien holder.