You need to have your in-laws go on the property as a second lien holder. You will have to work out any and all the details as to how the proceeds will be divided and what percentage they will get. You should also include the number of years this is to go. This second should be recorded by a title company that this lien is only to be in effect if there is a sale of the property. You may have to wait until the 1st loan close before adding this second as there might be a clause in the first loan docs that would prevent it being recorded at the same time as the first.

This is a common practice so don't get excited.

Now if you refinance the property and they have not been paid off, they will have to go to escrow and subordinate to a new first or forgive the loan if the loan-to-value does not work out. When the refinance is complete then they go right back on as a second mortgage.

Once the property is sold their lien would be paid off as specified by the agreement and addedum recorded by the title company. The escrow would cut seperate checks one for each lien holder that is on title, of which they would be one, as well as one for you the home owners of the proceeds left over.

You might want to check with an attorney as to the correct wording of the lien your in-laws would hold as I am not an attorney.

I hope this has been of some use to you, good luck.

"FIGHT ON"