parents in bother.. can they remortgage?

happybroker

Wow, the above is fairly cutting and misses the point that Dad's income is likely to be halving some time soon. Mum is obviously asking for help or she wouldn't have dropped around the credit card statements and OP has asked for some suggestions on possible ways out of what, I am sure Edinvestor would agree, is not an ideal situation.

The thought struck me this afternoon while I was waiting for my coffee at my clients house that your Dad may have payment protection on the cards which could be worth looking into.

EdInvestor

It's just the automatic assumption, in the absence of anything like enough information, that there is a crisis which is so annoying...

I suppose it's the arrogance of youth. The general assumption is that anyone over 50 no longer has a brain.

The motives at least in this case seem pure, so often they are not.:(

noodle

EdInvestor wrote: »

It's just the automatic assumption, in the absence of anything like enough information, that there is a crisis which is so annoying...

I suppose it's the arrogance of youth. The general assumption is that anyone over 50 no longer has a brain.

The motives at least in this case seem pure, so often they are not.:(

the 'arrogance of youth'... you are bang out of order. you do not know me (or my sister) nor do you know my parents. you don't know their history, what sort of people they are, or any thing else other than the outline financial information that i've given. you don't know that both my sister and myself are in our 30's and have carved out very good careers in financial sectors and got ourselves in sound financial positions through hard work and good judgement. you don't know that my father has had depression issues bought on by unmanageable debts in the past or that my mother is someone who has never been comfortable with financial matters beyond managing her own day-to-day expenditure or that my father is the sort who is far too proud to ask for assistance with anything until he's in a hole so deep he doesn't know where the entrance is, let alone how to get back to it. he's not dumb... he's incredibly smart, but 'money stuff' isn't his forte and never has been. i'm 32 years old and am paid a good wage by extremely serious people to run the finances of a £50million company... so i think i'm fairly well placed to assist him.

there's a very real possibility that dad will spend the rest of his life in a wheelchair with no income over and above his pension and whatever benefits the state affords him. if this issue is not addressed then he will be unable to meet his current obligations... let alone afford stuff like all the alterations to the home that could be required to deal with the possible impending change in lifestyle.

or maybe you're right, and i should sit and do nothing whilst mbna, capital one and the like suck off hundreds of pounds a month whilst dad lies in a hospital bed praying that he might be able to use his legs again. anything else would just be arrogance, right?

noodle

EdInvestor wrote: »

It's really very un wise to interfere in other people's financial affairs without permission.

i agree. which is why i will not do a damn thing unless he is happy with it.

It's your parents' business, not yours..

if people i love are in trouble, and i can help, and they want my help, then it IS my business.

So there is no crisis.Why are you creating one?Do you think it will help him get well?

i think that not having to worry about money will help him get well, yes.

And nor is it required.

which is why we won't do it. if it was required then we would.

They may not have been irresponsible at all.

i think that anyone with £32k of high interest debt, no assets to show for it, and no secure income stream from which to pay it off has been irresponsible.

They don't need bailing out if their debts are 5 times covered by their assets.

they do if their cashflow will be insufficient to service the debt and they cannot make suitable arrangements to refinance it.

Why?

dad is kinda tied up right now being unable to move.

Consolidation of debt into mortgages is one of the WORST ways of approaching debt , so that just shows us how much you know about finance doesn't it?

they currently pay an average of 19% interest on the debt. a mortgage would be more like 4%. if interest is accruing at 4% instead of 19% then the debt will clear significantly quicker (whoever pays it). if you want to take time out from being judgemental to suggest an alternative then please do so... that's kinda why i posted.

edit: and whilst i completely agree with the principle that mortgages are absolutely not the right vehicles for settling consumer debt... note that i would want something repayable over a very short term. if i was in this situation myself i'd look to take out a low-rate personal loan over the shortest affordable period. they have the advantage of an asset which should give them access to debt at half of the cost of a personal loan - and with more flexibility. the downside, of course, is that it puts the house back 'at risk' if things go wrong... but as you've already criticised me for suggesting they have a problem even though their assets are five times their debts... you must surely agree that the asset might have to come back 'in play'.

I suggest you leave your parents financial affairs well alone.They are not in crisis and are well placed to deal with the debt over the ensuing years.If your father is running a drawdown pension it is is likely he has quite a sophisticated grasp of investment .

maybe i know more about his pension arrangements, and why they are as they are, than you do. it's a crazy thought, but let's run with it.

This is more than we can say about you.

you're picking on the wrong guy at the wrong time.

noodle

getmore4less wrote: »

Cannon Fodder hit the nail on the head

Find the root cause of the debt first.

If prepared to pay £600 to a mortgage why not just give them £600 towards the debt on the understanding they budget, have their spends supervised and they contribute as much(£750) as they pay now.

Even at 19% average the debt will be cleared in 2.5years.

They still have a minimum £500pm + mums money to live off for those 2.5years, will need some cutbacks but thats the lesson they need to learn.

but if we do that then the credit card companies are taking a massive slice of money that i would much prefer was in the hands of at least one member of my family.

we will do our best to find the route of the debt. they have been living very well for a good few years (fancy holidays, eating out etc) which will be a factor, but i think there's something more.. but if i'm right then dad won't admit to it in order to protect a friend (who doesn't need protecting). we will talk to him and mum, and look at whatever pieces of paper we can, but contrary to what some posters here may think, we'll respect his right to keep things to himself and settle matters when he's able.

i absolutely agree that we need to understand why they're in the situation (and they do) so they don't end up in a true crisis. if they want to keep spending more than they earn, and are happy to see their asset base eroded, then that is their right... though i reserve the right to help them make their money go as far as possible (i.e. keep any borrowings cheap). i want them to be happy, but i want them to be financially comfortable and independent. there are three children and we want them to live as well as they can and die, many many years from now, owing and owning as little as possible.

noodle

happybroker wrote: »

The thought struck me this afternoon while I was waiting for my coffee at my clients house that your Dad may have payment protection on the cards which could be worth looking into.

sadly not. i think he's like me and runs a mile from those kind of policies. it's just rotten luck that he's one of the few that might have gotten his moneys worth.

i do need to talk to him to find out whether he has any other insurance policies in place that might pay out... but i doubt it as i've seen no evidence of him making any payments to anyone.

temba

You sound like a very astute person, who is dealing with a difficult situation very wisely, by gathering as much information as possible to form an informed and sensitive solution to the problem. I was just thinking how fortunate your parents are to have people like you and your sister for offspring when I read the attack on you in the posts above which I think was out of order and totally uncalled for.

Mrs_Bumble

I echo temba comments above and wish you luck noodle I hope it all works out in the end