loan to father

bmw001

elderly father has got himself into a sticky situation, in a nutshell, re-mortgaged his house -interest only mortgage approx 10 years ago, term now up and bank would (and quite rightly so) like there money back, only problem is my father does not have the funds to pay. I on the other do, have a nest egg i could use, i do have other siblings but they are not in a position whereby they can help. It is a substantial amount of money,my question is how do we go about this, what options are available...and is my money safe? I do have a young family which I do have to consider.
Any advice would be much appreciated...he does have a pension, both state and private so in effect he does have a reasonable income.

chalkie99

Family meeting to discuss (fend off future problems first).

Get a proper valuation of the property now.

Work out the percentage at today's values which you need to pay off.

Agree with ALL members of family that you will buy that share of the property and that only the balance would be distributable amongst everyone on your fathers death (if that would be his wish).

Get EVERYTHING done properly by a solicitor.

chalkie99

Yes,

and ................:question::question::question:

CHR15

I second the meeting with all likely beneficiaries of the Last Will and Testament.

Get them all in the same offcie with a Solicitor present so nobody is in any doubt what is going to happen later on.

Even the closest of Families regularly destroy their relationship come the division of Assets (most of which have already been grabbed by someone else)

lawrie28

You need to decide whether he is repaying this as he would a mortgage, or whether you are happy to leave the money in the house until it is sold. You may want to consider a legal charge over the property (just like a mortgage co would) so that it is secured.

Will the bank not remortgage?

Ask you siblings if they would like to help as I know I would rather that it was done as a family thing, rather than just something I have done to help, and may mean you dno't stump up the lot.

bmw001

Siblings not in a position help otherwise they would. With my father being nearly 80, I dont think the bank will allow him to remortgage, as you can imagine he is getting quite stressed about it all, to top it all off, his wife has just left him!

skintandscared_2

chalkie99 wrote: »

Family meeting to discuss (fend off future problems first).

Get a proper valuation of the property now.

Work out the percentage at today's values which you need to pay off.

Agree with ALL members of family that you will buy that share of the property and that only the balance would be distributable amongst everyone on your fathers death (if that would be his wish).

Get EVERYTHING done properly by a solicitor.

Agree with all of this. Also, please ensure that when the mortgage is paid off, the buildings insurance is maintained. My father had an issue with his insurance company that they would not continue covering him once the mortgage was paid off! If you own such a large stake in the property, it's obviously in your interests to ensure it's still fully insured.

bmw001

Thank you all for all your advice.

margaretclare

What we did, to pay off an existing mortgage in 2003, was to do equity release - a 'lifetime mortgage'. To release 25% of the value, which was needed to cover the mortgage, one of us had to be at least 68.

Have a look at https://www.ship-ltd.org

HTH

jonesMUFCforever

Why not tell Barclays that dad does not have the money to repay (but presumably has funds to carry on paying the interest) and see if they will extend the mortgage?
They have nothing to lose as their security is safe ie they will get their money when dad passes away,
this avoids any potential family feud.

wotway

You could also consider a 'Mortgage by demise' that is you lend him the money and register your charge through a solicitor as advised. It's entirely up to you how it is worked out .Your family can't expect to call the shots if they are not able to help.Of course I understandit's delicate.