What can my mother do?

sw_jay

3 years ago my father died leaving my mother with a 4 bedroom house to run and debts of over 30 grand. My mother is 65 this year. She gave up work to provide full time care to my father during the years before his death. She has no savings and consolidates her pension by doing a small cleaning job for a few hours a week.

2 years ago she decided to use the equity in the house to take out an interest only mortgage of £36000 to pay off her outstanding debts. The house is currently worth in the region of £150000. Of course this means she will be paying it until she eventually dies. Her mortgage is due for renewal in December.

Mum has now started to suffer ill health and is struggling to keep up the repayments on her mortgage, plus pay for the upkeep of the house. She desperately needs an operation to help with her arthritis but this would require her to give up her cleaning job. She is refusing to do this as she feels she would be unable to survive on just her pension. She is terrified that should she not be able to repay her mortgage the house might be repossessed and she would have nothing to pass onto her children.

My mother has considered downsizing to a smaller house, however by the time she has repaid the £36000 mortgage and paid for all of the fees associated with moving she would be unable to find somewhere decent to live with what money she has left. Although she is realistic in what she could afford, she would really like to maintain her independance by having a garden and somewhere with a spare room for the grandchildren to stay.

After much pressure from my siblings I have considered taking the mortgage from mum and owning a percentage share in the house (roughly a quarter). That way she could remain in the house for as long as she wanted as she would be mortgage free. However I am reluctant to do this for several reasons:

1. I am looking to buy my first property in the next year and do not want £36000 tied up in another property which would seriously effect my buying potential.

2. I can see no financial benefit for myself in paying the mortgage. Over 10 years a £36000 mortage would cost me £20000 in interest. In order to recoup my money, the house value would have to increase by £80000 in that time so that my quarter share in any equity made would equal the payments. In the current climate this cannot be guaranteed.

3. Rifts could be caused within the family should there be any disagreements. Eg. If I needed to sell the house in order to fund a property purchase of my own.

Obviously I would love to help my mother and allow her to enjoy the rest of her life without financial worries, however I do not want to commit myself to something that is also going to cause me financial difficulties.

Does anyone have any advice for me regarding this. Would buying into the house be a wise move or a big mistake? Alternatively any other suggestions for things my mother could do to help herself financially would be greatly appreciated. For example, would my mother be able to apply for a council property and then use the proceeds of the sale of her home to live on or would the fact that she owns her own home mean that she would not be deemed suitable?

Thanks

Trying_to_be_good

It might sound obvious, but have you checked if your Mum is entitled to any benefits? It's not a position I know about, but would hope this is a case where the state could help out.

As you don't own your own property or have the spare cash to pay off your Mum's mortgage, I think you're right to be wary of taking on the responsibility which will be long-term.

sw_jay

My mum already claims what benefits she is entitled to but unfortunately they don't add up to much. She is entitled to full council tax relief which helps a great deal and she is just about coping ok at the moment as she is still just about fit to keep working. It is the future that I am worried about should her health continue to decline and she has to give up her small job. I'd really hate to think of her working when she's 80!

Treading_Water

Sooner or later you Mum is not going to be able to cope with the house or you may have to sell it to pay for her care.
Why not consider selling it now and renting. The money could then be invested to cover the majority of her rent and she could have a nice lifestyle without having to carry on working - or only to work as much as she wants to.

JimmyTheWig

From what you have said I think it would be a bad idea for you to take on your mum's mortgage.
I don't know what would be best for your mum, but causing you problems is not the answer - for her or for you.
The plan would only work if (a) you were financially comfortable and (b) if your mum was nearer an age of, um, not needing the house any more.

Other than money, how happy is your mum living where she is? How will this house suit her as she gets older? (e.g. is there a downstairs bathroom?, does it require a lot of upkeep?)
The reason I ask is because a move might actually suit her. If she doesn't move soon then she may well get to a point where she can't face moving.
If a move would suit her then the fact that she would only be a bit better off would still be a bonus.

Good point about checking benefits.
The other thing would be for her to post an SoA on the debt-free-wanabe board here and ask for help in that direction.

Ivrytwr3

It's your mum! Do whatever you can to help. Do you think she thought "well i don't want to tie up any of my money in my children as i don't think i'll get a good return"

NO!! She would have given you her last drop of blood if she needed to.

sw_jay

Excuse my stupidity but what is an SoA?

sw_jay

Ivrytwr3 wrote: »

It's your mum! Do whatever you can to help. Do you think she thought "well i don't want to tie up any of my money in my children as i don't think i'll get a good return"

NO!! She would have given you her last drop of blood if she needed to.

Dn't get me wrong, I'd do anything to help my mother. Hence why I'm asking for advice on here. However I also have to think of my future. What if I want to buy a house or start a family in the next few years?

Besides which, my mum also has 4 other children who are all unwilling to assist. The responsibility does not only rest on me. Unfortunately because they all have families, homes and responsibilities of their own they believe I should be the one to help.

Ivrytwr3

Unfortunately because they all have families, homes and responsibilities of their own they believe I should be the one to help.

Well this one hell of a selfish attitude! What if you don't help? Would they prefer to see her homeless or in a home?

Your mum must be sooooo proud.

red_bertie

Statement of Affairs, if no-one posts a link for you, I'll come back later and do it [in a rush now].

Would any/all of your siblings be interested in/able to take on the mortgage - individually or jointly?

red_bertie

here it is:

http://www.makesenseofcards.co.uk/soacalc.html

good luck.