Advice for my mam..

RAS

Locana wrote: »

Hi,
Thanks! Interest only - pah. When I found out I was soo mad. She said it was the 80's and thats what people did. Its a shame they didn't think of the consequences. Anyways, its too late now!

Was very common BUT attached to an endowment or other payment vehicle.

Did they cash in the endowment early?

Locana

Hi RAS

Yeah, it was 33,000. At some point they must have increased the mortgage. The endowment was payable when my father passed away. No, she didn't put it towards anything, as far as I know its gone..

Thanks
Lo

Yorkie1

I may have misunderstood, but if she has nothing left from £33K received 18 months ago, and still has debts, then is there a bigger financial picture here that needs looking into?

RAS

Locana

based on what you have posted here, I thibnk your mum needs some outside help

http://www.moneysavingexpert.com/loans/debt-help-plan#help

The best option may well be CAP because they do face to face support and by the sounds of things phone support may not be your mum's thing.

You need someone to explain that staying in the house is not an option and that she needs to review and amend her expenditure urgently.

Johnandabby

Locana wrote: »

Thanks Johnandabby.

My flat is 2 bed so no room. I am trying to save to buy another, with the intention of renting my flat long term. The flat is my pension if you like. But to buy another is in the way distant future.

Pooling our money is harder, I have a sister and I want things to be equal! If anything happens I don't want her to suffer, or if anything happens to me my daughter misses out. I would like it to be as fair as poss. So I guess advice on equally leaving property/money in wills would be good advice too, if we go down that road.

Thanks
Lo

I completely understand, it's a really difficult situation for you. Simplest way is for your mum to sort it out herself without your financial input, but you wouldn't be on here if this was easy.

The fairest way for everyone is for your mum to engage with this and help to resolve the issue. If she doesn't the risk is you will lose your security as well if you get too financially involved.

Unfortunately when money is involved it's rare for all relatives to view the same thing as being fair. When my mother-in-law died recently it ended up splitting the family as people's true colours were exposed!

While it's important to look after your mum, your priority has got to be your daughter's future and you shouldn't do anything to jeopardise that.

onlyroz

Really, 15 miles is nothing. Surely it wouldn't be so bad her moving a short distance away? Or short of that, I would have thought she could get a 1 bed apartment even in London for less than £200k. The other option is for you to pool your money and get a large place together.

Kynthia

Unfortunatley your mother has had years of warning that this was coming. It seems like any efforts to delay the inevitable will only cost her, and possibly you, more money. Her only real choices are to downsize or get a repayment mortgage on the current or a new property.

What are her chances of getting a repayment mortgage? You say she has two jobs and a lodger? Her age will count against her, as will any other debts. Could she afford repayments? If she can't on the current house due to needing £140k, what about buying something for £250k and borrowing the £50k? Would that allow her to live nearer?

Locana

Hi all,

Thanks so much for your help. I think much of the 33,000 went on a DMP and she paid it off. Another issue was vulture family members doing up her kitchen and charging her so much money just after my dad died. Her mind was elsewhere to notice, but thats another story. Thing is with her is that she doesnt say much and only says something when its near enough too late.

1 bed property wouldnt be suitable as she cant live on her own, and would need someone stay with her. It's an annoying issue that she has, but one that just won't go away.

Kynthia - that is actually a good idea, I will look into that today and this weekend I think me and sis will present her with options and see what she says. We do think she will have to sell though. 250,000 will definately bring her nearer.

Wish I could rewind to the 80's and tell my parents off!

Thanks for all your help guys,

Lo

moneyistooshorttomention

Locana wrote: »

Hi,

Thanks! Interest only - pah. When I found out I was soo mad. She said it was the 80's and thats what people did. Its a shame they didn't think of the consequences. Anyways, its too late now!

Rent in this area will be around 1200, so thats a no-no. I know it would kill her to move away from us, she really is too scared to move away. It s something she has suffered from since childhood.

I guess we could look at properties that need doing up nearer.. I'll have a look at that. I'll give the thread a read too.

Thanks
Lorraine

That is NOT what people did in the 80s. At that point in time, it was the norm to either take out a repayment mortgage (with capital repayments being made) or an endowment mortgage (with the mortgage paid up at the end). I'm not aware of "interest only" mortgages even being available at the time.

So - is this an "interest only" mortgage or is it actually an endowment mortgage that has failed to pay out as planned?

Apart from that angle though, I'm another one who thinks "Surely she must be able to find somewhere to buy for no more than £200,000 and if she has to move then she has to move". What I DO wonder is whether she is exaggerating her fears of moving away from her current area in order precisely to try and manipulate someone else (and you'll do as that "someone else") into sorting out her situation for her - eg by maybe selling your own place and moving in with her. She may be trying to line you up to do precisely that to solve HER problem and you then would have the problem of not owning your own place any more and could find yourself automatically turning into a carer for her (whether you have chosen to or no) if she becomes ill later on in her life.

EDIT: Just read the rest of thread and see that it was indeed an endowment mortgage and that your mother seems to be...ahem....not exactly very good with money...

At her age, she would be eligible to buy any retirement flat she pleases (her age would qualify her for the lot of them) and she could manage to buy a specific "retirement flat" pretty much anywhere she chooses to and could afford it too. With that - it wouldnt be a "high rise" flat and she would have lots of similar age people living nearby and possibility of a communal lounge - so she couldnt complain she was "on her own". I would also think that she is either in receipt of State Pension now or will be any second and therefore doesnt actually need a job any longer (once her debts and mortgage have gone). I emphasise again "Don't be manipulated". Its astonishing just how far in advance some women can plan and arrange things to suit themselves later on in their life in order to ensure that other people "carry their burden" for them. Your mother is in the agegroup where some women planned and arranged their own lives and finances and others still had the "older model" way of thinking of not doing so and arranging themselves around what their husband wanted and it sounds as if she is in that "older mode" thinking and doesnt wish to change her thinking - but she has no option.

Locana

Ok....

I guess it was an endownment mortgage then. Still interest only. As mentioned in an above post, at some point they extended the mortgage to 140,000. 33,000 endowment must have covered the original mortgage.

My mum is not like that, thank you. She has had those fears all of her life and she doesnt actually know that I'm asking these questions on this forum. We all never realised the extent of her fears and it was a running family joke, until my dad died. Thats when we knew how bad she really was as she always had dad around. They never spent a night apart, but that was through her fears. Me and my sister have took it upon ourselves to try and help and and at no point has she asked us for any help. My mum would never ask me to sell my house to help her out! She won't even take 20p off me if she thought it might affect feeding my kid. The thing with her is that you got to hit her with all information at once, otherwise she wont talk about it. Thats what I'm doing - info gathering. She hasnt got a clue what we are doing and I don't know what she has planned for the future in her head.

Just to reiterate, my mum is a lovley woman, slightly nuts, but kind and caring. She is not trying to manipulate anyone.

Its not just cut and dry about having 200,000 to spend. It would be less than that as mentioned in an above post. There are many other details which I can't put on here otherwise it would be a book, but I'm giving the basics to seek advice.

Thanks for your comments though.

Lo.