My father took a loan on his house to pay for an extension on mine six months ago. He has been paying the loan until now. Can I make a heter iska now and include interest previously paid. If yes how can it be structured? It should be noted that the mortgage also paid off about $10,000 of his old debt. Can all interest payments paid until now count towards his personal debts and I can take over new interest payments with a heter iska. Also please guide me what type of heter I need to sign and how to structure it.
A heter iska cannot apply retroactively.
The question doesn’t clarify which arrangement was made initially concerning your repayment of the debt, but in any case if you wish to begin to pay interest (it doesn’t matter if you are paying his interest or not – this is considered paying interest on your debt to your father), you will need to make a new loan with a heter iska.
The way to do this is to forego or repay the original loan, and create a new indebtedness, with an interest clause, based on a standard heter iska document.