Worried about my parents mortgage

dmrobo

Hi all.
My mum and are 68 and 69 but they still have 107,000 left to pay on their mortgage. The house is worth around 180,000 and i was wondering if there is some way to use the money tied up un the house to cut down on the amount they have to pay out every month. They would like to stay in the house but at the moment it looks like they will have to move. Any advice on this would be greatly appriciated.
Thanks, Dave

towseriv

Unless you could find an enquity release company that would provide a minimum of £107000 lump sum and assurance or them staying on untill both parents have passed on then I doubt it. How did a bank allow this situation? I thought mortgages had to be paid up before retirement?

cattie

If they have a repayment mortgage they could try switching to an interest only one. This will reduce their monthly outgoings.

The drawback is that unless they have insurance that will clear the mortgage when one of them dies, the capital part of the mortgage will never be paid during their lifetime & the house will need to be sold to repay the lender on their demise.

Xbigman

The biggest factor is probably their pension position (assuming they have stopped working). If they have a decent pension then a downsize to a retirement flat is probably the best bet but they would still have a mortgage at that point and getting a mortgage might be a problem.

Equity release is unlikely to raise enough to pay the mortgage but is possibly worth a look once they pass 70.

Another option would be a relative buying the property from them now, or buying the part that is mortgaged.

Could they sell up and rent? If they sell and end up with 70k in cash that would not give them enough return to completely cover the rent without eating into the capitol (although the capitol would last a long time in those circumstances) so the exact amount of the rent they would pay and how much of their pension they can put towards the rent would be the biggest financial factors.
Regards


X

sm9ai

How on earth did they get into that situation in the first place?

jonewer

er.... if you aint paid for it you aint paid for it.

Why are they so keen to keep the house? Sell it, rent a 1-bed flat and blow the 70-large on saga holidays!

Leon_W

The fact is sm9ai they have been putting it off and putting it off until it's now too late to do anything.

The fact is with an interest only loan that it is up to the borrower to have something in place to repay the capital at the end of the term - no one elses.

This can take many forms. ISA. Pension, Savings, lump sum inheritance, other investment. You name it, it can be used legitimately.

It is also no use to plead "well I didn't know". The fact is that lenders write to all I/O mortgages holders (along with the annual statement) stating the fact the balance remains outstanding.

There is also nothing wrong with taking an interest only loan into retirement. As long as you have the income to keep paying then where's the problem ? In fact it is sometimes advisable to have as large a mortgage as you possibly can afford into old age especially if it would be the case where the "inheritance tax brigade" and "care home fee vultures" are circling.

If you havn't got it then they can't take it !

It's not that I don't sympathise with the OP, I do, but it is of their own making.

regularsaver1

Are you sure that this mortgage is not a retirement scheme already meaninf that they pay the interest now and then when they pass away the house is sold and the lender gets the capital back?

worth asking parents and lender for more info

horace_2

Parents almost 70 years of age?
Little income to pay mortgage?
How have they managed to date?


Sounds like a wind up to me.
Does anyone suspect that the progenitor of this topic may be spawning a few pork pies?

horace.

CB1979_2

horace wrote:

Parents almost 70 years of age?
Little income to pay mortgage?
How have they managed to date?


Sounds like a wind up to me.
Does anyone suspect that the progenitor of this topic may be spawning a few pork pies?

horace.

or you could just be talking out of your horace!:rotfl:

Ivrytwr3

I understand the need to stay in their own home. How about the siblings chip in and help each month with the morgtage? After all they have subsidised them all their lives, how about giving something back.

This will help the folks stay in their home, protect their inheritance and the OP can have some good karma come his way.