Mortgage advice for my retired parents

Shelley159

Hi everyone,

I'm pretty new to this site and also don't really know much about mortgages so apologies in advance if I miss out any info!

My parents are retired and receive a normal state pension plus pension credit, but no other income. They are really struggling to pay their mortgage, I think they have around £10,000 left to pay over the next few years, it works out to be between £300 - £400 per month.

Can anyone let me know if they would be better off selling up and getting a smaller house, or renting even?

Any advice would be much appreciated,

Many thanks

Shelley

powerwin

Could they actually afford by themselves to stay where they are until the mortgage is paid off?

What is their shortfall per month?

Do they want to move / would they mind moving?

Rgds

CloudCuckooLand

The costs of selling would be £2-£3k probably. Buying again another £2k. Depends on values of property involved.

Can they get another place for £15k less than the current place is worth? Would they want to?

I would not want to rent through retirement. That's the point of buying in the first place, for me.

What was their plan for finishing the mortgage, when they took it out? Are there endowments tucked away somewhere, that they have forgotten about?

Could either of them get a part-time job to supplement income? An active retired person does my gardening...

Any assets that could be sold, to raise cash?

Do the terms of the mortgage allow overpayments? Could you help them pay a chunk or all off, to avoid the interest of the next few years?

Shelley159

Thanks for the fast replies!

powerwin - I think they are just about scraping by, but have utility bills outstanding so it's not a great situation. I think incomings are about £800 - 900 a month, with outgoings being the mortgage, bills, food etc, I'm not sure how much the outgoings are but I can find out. And I don't think they want to move really, I'm just trying to find out what options they have so they don't need to be worried about money all the time.

CloudCuckooLand - The house is a 3 bed semi detached, worth around 150k going by similar house prices in our area, so yes they would be able to get a smaller house for less money. And as far as a plan for the mortgage, I don't think there was a plan, the mortgage was taken out sometime in the 60's for about £13,000! And they have just kept re-mortgaging since due to money problems. They don't have any other money or assets and I would help if I could but I only earn minimum wage myself with a baby due in 2 weeks time. My dad retired early due to physical work giving him a bad back and my mum has agoraphobia so I don't think there's much hope of them finding jobs. It's just a sad situation, at the moment I'm relying on a lottery win to help them out!!

CloudCuckooLand

Downsizing sounds like the least worst option, then.

Unless they want a lodger..? Obviously it would have to be someone they trusted and felt comfortable with in the house all the time...

lazer

As they are recieving pension credit, getting a part time job to supplement income won't a help as it will simply reduce the amount of part time income declared.

As you have said your dad has a bad back. mum has arophobia, make sure they are getting all the benefits they are entitled to.

Also as far as i aware pension credit is £210 per couple. Therefore if there mortgage is £400 a month (ie: £100 a week), they should still have £110 a week left to spend.
I assume as in recepit in PC that they do not pay council tax etc.

I know that £110 doesn't sound a lot, but they should be able to live on this, if the budget is carefully planned. This can be increased through small things, like making lump sum payments etc.

Do they have a car, or anything else that would be worth selling to pay off some of the mortgage and reduce the amount owing?

SouthCoast

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