Parents Finances

Phil_Davies

Hello All,
I am currently trying to sort out my parents poor finance problem. They live in thier own house but still owe £18k on the mortgage of which they are only repaying interest only. Their sole income is from my fathers state and small private pension.
My parents have never claimed any assistance of any kind and my mother has recently been made unemployed from her job because of cut backs.

I have been told that they are only entitled to benefits if the meet certain criteria.

My major concern is the debt that they owe to thier mortgage lender.

Is there anyone out there with some suggestions of how to sort out this problem?

Kind reagrds

Phil Davies

toonfish

what ages are they, and what is their total level of income and savings?

first call for benefits advice would be the CAB as there is a chance that the government would meet their mortgage repayments for them. They are best placed to advise and I would try there first.

Phil_Davies

Hi, Thank you for your reply.
My father is 65 and my mother is 59. They have £8734.88 income a year. And have some savings around £5k

Phil_Davies

Hi, Thank you for your reply.
My father is 65 and my mother is 59. They have £8734.88 income a year. And have some savings around £5k

toonfish

I think they should be able to get pension credit and council tax benefit at least - take them to the citizens advice bureau. Most means tested benefits they can get as long as their savings are less than £6000

Phil_Davies

Hi
I am able to have the house signed over to me (with parents full consent) taking on thier outstanding mortgage debt and converting this to a Buy to Let mortgage??

Is this legal/common practice?
What would be the implications?
Can I use the equity in their house to pay off my mortgage and get a Buy to Let on theirs??


All help welcome.

Kind regards.

Phil Davies

toonfish

you could do this - in effect you would be buying the house off them. Whether it is a good idea is another thing altogether.

If they simply give you the house this could have future implications if, for example either of them needed long term care.

Unless you are going to charge them a market rent (which would be dearer thantheir mortgage) then there seems little point in raising money at buy to let rates, generally with bigger fees attatched to repay a residential loan that you should be able to arrange more cheaply.

Check out the benefits situation first - they could be entitled to a lot more than they realise perhaps a few £1000's a year which will make a big difference

Phil_Davies

Thank you for your time and advice Toonfish

Fruitcake

Some BTL lenders don't allow you to let the property to a relative so you need to check this up front.

Fruitcake

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