Taking on parents' debt V equity release

Thrugelmir

jaybeetoo wrote: »

To take out a mortgage when you are 65 is unusual. I don't know what advice they were given. If they can't afford the repayments has something changed or was their pension never going to be enough to repay the loan?

I just feel it is something worth exploring if only to discount it.

Why should they have received advice?

From the OP's opening post circumstances have changed.

So a question of personal responsibility and taking action.

Ping42

Thanks everyone. I sort of agree with you all. I will explore the missold angle (only out of desperation) I had thought it was maybe immoral rather than illegal. And I say immoral, as by my own standards the thought of someone being in full time employment until they are 75 isn't a likely or something to be relied upon to get a mortgage.
Yes their circumstances have changed... to me the obviously would but I agree, no one forced them to take out a mortgage.
Some difficult conversations need to be had over the next few weeks and as yet we don't know the full picture only a blurry outline.

Thrugelmir

Ping42 wrote: »

And I say immoral, as by my own standards the thought of someone being in full time employment until they are 75 isn't a likely or something to be relied upon to get a mortgage.

There's no longer forced retirement at 65.

Many people work part time to supplement income in later life.

Ping42

Thrugelmir wrote: »

There's no longer forced retirement at 65.

Many people work part time to supplement income in later life.

I agree and I do think that's right, if you want to work and are able to fantastic, but there's a big difference between 65 & 75 (ten years to be exact!)

Chosing to and being able to, find a job, keep a job and be fit for a job are very different options.

I'm just ranting because I'm annoyed. I'm actually pleased people are so straight talking on here as it's how i'm feeling.
I'm hoping that things aren't as bad as they appear at face value and that when they see the true cost of equity release they may be slightly more open to considering other options.:mad:

Thrugelmir

Ping42 wrote: »

I agree and I do think that's right, if you want to work and are able to fantastic, but there's a big difference between 65 & 75 (ten years to be exact!)

Chosing to and being able to, find a job, keep a job and be fit for a job are very different options.

My mother is 84 and still takes keep fit classes for the over 60's.

So not for a lender to decide.

Thrugelmir

Ping42 wrote: »

I'm just ranting because I'm annoyed. I'm actually pleased people are so straight talking on here as it's how i'm feeling.

Your parents are only human.

jaybeetoo

Thrugelmir wrote: »

Why should they have received advice?

From the OP's opening post circumstances have changed.

So a question of personal responsibility and taking action.

I agree they should take personal responsibility but lenders also have a duty to lend responsibly.

We don't have all the facts and rather than speculate and guess I am suggesting the OP finds out what happend. If they were given bad advice then the OP should follow it up. If the mortgage advice was sound then this option can be ruled out.

nearlyrich

I find it all a bit distateful when people speak about people in their 70's as if they are all unable to make a financial decision (even in their 60's) it's a bit like some parents who get too involved in their offsprings' lives and don't let them grow up and take responsibility for their actions, some adult children start taking over their parents affairs as if they have lost their marbles just because they have passed a certain age.

holly_hobby

jaybeetoo wrote: »

I agree they should take personal responsibility but lenders also have a duty to lend responsibly.

Exactly, hence most have a max redemption age of 75 yrs, and under their regulatory and legal remit, will have verified the individuals income AND its source to be suitable and appropriate, during the term of the mortgage.

As has already been stated, a mis-sale is not based on an arrangement NO LONGER being suitable, just that appropriate advice was given at POINT OF SALE (if this was indeed an advised sale at all).

Getting back to the plot, there is a high st lender whom dont have an upper age limit, BUT income must be suitable and sustainable during the term, and it sounds as though this isn't the case.

We of course have the lifetime equity release option, but that will directly erode the free equity in the property (so beneficiaries may not be too happy), unless a provider is sought whom permits payment of interest (effectively ringfencing the debt), of which there is a current provider in the market (subject to critera, and property value and max ltv given the relatively young age for any LTEQ exercise).

Other than that, back to the OP releasing the funds out of his own home, redeeming the current mge of Mum and Dads, and placing a charge on their house for the 40k (to ensure that his loan/investment or whatever it is termed as, is protected on sale on the property/parents death if there are other siblings and no will noting the arrangement in place.

Hope this helps

Holly

Ping42

nearlyrich wrote: »

I find it all a bit distateful when people speak about people in their 70's as if they are all unable to make a financial decision (even in their 60's) it's a bit like some parents who get too involved in their offsprings' lives and don't let them grow up and take responsibility for their actions, some adult children start taking over their parents affairs as if they have lost their marbles just because they have passed a certain age.

Apologies if you think this is the case but I'm talking about one specific couple who are my OH's parents. My own parents are older than this, completely switched on financially and have planned for retirement all their lives. This isn't about trying to be offensive or interfere, it's caring about their future and trying to ensure they can live comfortably. Which is why I say they should in our opininon move but they won't as THEY don't want to.....:)

I've got enough going on with my own life without taking over their affairs, just trying to find out possible options to present to them to make an informed choice.