Take a mortgage for my parents?

nink_2

Meaning no disrespect, I don't think they can afford to retire. If it were me, I'd be working at B&Q, Tesco or whatever and let my children live their own lives. It doesn't seem particularly fair to me.[/QUOTE]

Easier said than done when my father in law needs to stay at home to care for mum who can't do much for herself anymore.

If life was fair I don't think these forums would have much activity would they. I'm really shocked at how many people think helping out their parents is a bad idea when well they're our flesh and blood and how much they've helped me in my life.

Thanks kingstreet for ur post and advice. Thanks ash28 point ref losing benefits, good point and flaw in plan. Btw the equity plan starts at the £134 borrowed and interest is 6% apparently no charge on the property, tho all the other clauses are worrying.

Tabby cats my nice to hear someone in similar situation I'm not the only one out there thx!

Seriuosdfw yeah I was kinda hoping more people would agree tbh. I thought it was a good idea or what if I changed the option and actually offered to buy a 30%ish share in the property by taking out a mortgage to pay off the outstanding mortgage?

Sandsni 1) reasonable above average salaries no bad credit and also I'm married so it would be myself and partner who apply. 2) evict is strong word but thought parents could claim housing benefit to pay rent as already on income support. I could cover 80% of the mortgage repayments comfortably but not quite all of it on my own. 3) yes would have to take another hit on income tax 4) my dads a builder and other dads a plumber plus friends in trades so can get stuff fixed tho ur right if something more serious there cud be an issue

I really appreciate all the replies thanks except some a little harsh especially those who say haven't worked hard enough, there is more to it than meets the eye and these kinds of comments aren't actually helpful - we are where we are. I think given the amount of risk and negativity I will probably fold on ever suggesting it to my dad. I'll let u know whether the equity deals getting signed, should know within couple of weeks and if this fails well I guess they will be forced out of the house either way.

Annisele

nink wrote: »

Seriuosdfw yeah I was kinda hoping more people would agree tbh. I thought it was a good idea or what if I changed the option and actually offered to buy a 30%ish share in the property by taking out a mortgage to pay off the outstanding mortgage?

You won't find a lender prepared to give you a mortgage on 30% of house. You *might* find a lender prepared to give a joint mortgage to you and your parents, with ownership split between the three of you in whatever proportions you want - but that might cause issues with your parents' age.

thought parents could claim housing benefit to pay rent as already on income support. I could cover 80% of the mortgage repayments comfortably but not quite all of it on my own.

Sorry, that's another non starter. You can't claim housing benefit for a property you used to own.

sandsni

There's absolutely nothing to stop you helping your parents. You can give them money every month to help pay their mortgage and no one will tell you you can't. But you asked about the feasibility of getting a mortgage to buy your parents' house. If you just want to help your parents you don't have to own the house to do it.

Your parents wouldn't be able to claim housing benefit on a house they just sold to their son. If they could, the tax payer would be effectively funding your purchase of your parents' debt. Would you want your tax £s funding such a scheme?

manzanilla

Sorry but I am another one who thinks the whole situation is a nightmare and that they should sell, dropping the price as far as they have to.

Selling to you at an undervalue stores up all sorts of benefits, tax problems.

And if you are struggling to get on the property ladder, the LAST thing you need is to own this millstone of a property which your parents are living in because it will make it MUCH harder for you to buy anywhere yourself.

Btw the equity plan starts at the £134 borrowed and interest is 6% apparently no charge on the property, tho all the other clauses are worrying.

lots of alarm bells ringing there, No equity plan could avoid taking a charge on the property - it would be ludicrous. Something somewhere has been badly misunderstood. Could you please post more details of this equity plan.

It's good of you to want to help your parents. But at their age the kindest thing you can do is help them find a good way forwards, even if this means they can't stay in the old family home. Any sort of short term fix is going to mean that they lose the house at some point and have a lot less money to buy somewhere that they can afford.

mikthe20

OP, have your parents looked into claiming SMI from the government (Support for Mortgage Interest)?:

http://england.shelter.org.uk/get_advice/help_with_housing_costs/support_for_mortgage_interest#claiming_for_help_with_interest_on_other_loans

They may be able to get the interest paid on the mortgage. You could then top it up as required to make the capital payments.

It's very admirable that you should want to help, but FWIW and having direct experience with in-laws in a similar position - they were just profligate, totally crap with money and lacked self-control over many years. And even if helped they just carried on spending money on luxuries and frivolities and getting into trouble once again. They downsized from their "I'll only leave in a box" house to clear the debt and are very happy in their low maintenance flat.

buzzyzoe

I might be missing something here, but if, as you mentioned in your initial post, they would pay you rent which would cover your mortgage, why can't they just use this money to pay their own mortgage?

I'm not an expert on mortgages, I know lenders won't always lend to people who are retired, but if they already have a mortgage, surely this wouldn't be an issue?

I agree with the majority of what people have said so far, it sounds like their best option is definitely to downsize, and not have to worry about paying any mortgage/rent, and just concentrate on paying off their sizable credit card debts. Of course it will be upsetting for both you and them, but it's better than either of you running out of money completely!

jellie

OP - you mentioned having a sister. How would she feel about you buying your parents' house for less than half it's market value? Might cause problems when your parents pass away - she won't be entitled to any inheritance from the house because you will own it, not them.

Could both you and your sister just give your parents money each month to help out with their mortgage?

kingstreet

nink wrote: »

I thought it was a good idea or what if I changed the option and actually offered to buy a 30%ish share in the property by taking out a mortgage to pay off the outstanding mortgage?

You simply cannot do this. Lenders don't work in portions of property. You need a mortgage which is secured on 100% of the property and it would have to be taken in the names of the three owners as both you and they would have to be both.

Then you get problems with the term of the mortgage, due to their ages and their incomes and if they will support the amount being borrowed if you can't afford it to the lender's satisfaction.

Finally, as mentioned elsewhere you can't buy the property from them and rent it back to them, then have them claim housing benefit. That's a contrived tenancy and not acceptable.

[Deleted User]

nink wrote: »

I'm really shocked at how many people think helping out their parents is a bad idea when well they're our flesh and blood and how much they've helped me in my life.

I'm in a similar position to you at the moment nink, my parents are in a very difficult situation and I'm spending a significant amount of money helping them out, because like you I believe helping family out when possible is something that should be done. I've had to make sacrifices (moved back to my home town) and missed on some opportunities but that's what families do, right? However in our situation there is no alternative to what I am doing, except for homelessness I guess.

However in your case I agree with others who have said this is a mistake. You're trying to take on a huge liability to "help" your parents, however there is a very clear solution that does not involve your financial commitment at all. If there is a problem that needs to be solved the simplest solution is almost always the best. The solution in this case is for them to sell their house, clear all their debt and buy a new place suitable for their retirement.

If your life changes, maybe an opportunity presents itself or you lose your job or you find love and need to move to Australia, you're going to have a very big problem on your hands: you'll be forced to evict your parents from the home you helped save so that you can sell up and move on with your life: if there is one thing that will destroy a relationship, it's that...

You should help your parents if you can but putting yourself in a sticky situation to do so is not responsible. Your parents made a bad call when they decided to ignore the requirements of their mortgage, they need to accept this and move on. If you do this you'll just be adding a little glue to their house of cards, one big storm and it all falls apart.

martindow

nink wrote: »

Easier said than done when my father in law needs to stay at home to care for mum who can't do much for herself anymore.
.......
I really appreciate all the replies thanks except some a little harsh especially those who say haven't worked hard enough, there is more to it than meets the eye and these kinds of comments aren't actually helpful - we are where we are. I think given the amount of risk and negativity I will probably fold on ever suggesting it to my dad. I'll let u know whether the equity deals getting signed, should know within couple of weeks and if this fails well I guess they will be forced out of the house either way.

Are they claiming all of the benefits to which they are entitled - Attendance Allowance for instance which is paid according to need and is not means tested?

Sorry if you have been hurt by comments about not working hard enough - I assume you are referring to my post. You mentioned that they had worked hard all of their lives but without an explanation it does seem that they may have had their heads in the sand hoping it will work out when they should have been planning for the end of the mortgage term.

I'm afraid that house prices rising leading to a large equity are not connected with how hard someone has worked.

Your parents do have a route out of their predicament even if it is not what they ideally would want. I hope it works out for them.