Parents want to move into flat, from detached house, why??

Werdnal

berbastrike wrote: »

Their situation is currently, own house £200k, £150k left on mortgage, combined gross income £40k plus £15k pension (for rest of their lives)

they want to sell house, and rent flat for £1k per month. I'm telling them not to be so stupid as when you rent, you will never see the money again!

You haven't said what ages they are, but sounds to me as if they want to clear their debts and free up their cash to live a little, plus reduce all their assets so they are not made to pay for residential care in their old age.

Either that, or they are spending your inheritance - is that the real reason you are so concerned about this plan :rotfl:

meg72

Have you asked them why They may be coming to that time of life when they are feeling tired, the work involved in keeping a large detached with garden is onsiderable. I moved from a large 4 bedroomed house to a cosy one bedroom bungalow with a small garden and it was bliss, but with health issues even the small garden is too much now so may move again to a flat.

I think you have to accept that they know what they want for themselves.

I_have_spoken

I'm in a detached with nice garden, there's always something you could be doing!

I "downsized" my (retired) parents from a large house to groundfloor flat a few years back. They love it. No stairs, someone does the weeding, someone cleans the communal areas, it takes minutes to zip around with a hoover, they never worry about a tile coming off etc. Now they have reduced mobility, I've added grab handles on all the door frames etc.

System

what is the better move financially, pay off mortgage or rent?

Ivana_Tinkle

I'd be concerned, if they've owned their own home for a long time, they might not realise how little security of tenure tenants have nowadays. Do they realise how easily they could be kicked out of a rented place?

Kayalana99

berbastrike wrote: »

what is the better move financially, pay off mortgage or rent?

I don't think it matters what we say. You don't want your parents to do this and our 'advice' is either going in one ear and out the other....unless its what you wanted to hear.

I shall try anyway...

Guessing that you are on this fourms your parents are 40s-60s? Paying of a mortgage is a long term investment...if your parents are already at a good age perhaps its better now for them to have the cash in hand for them to enjoy thier retirement rather then keep paying off the house to die in it to leave it to you... Not saying thats what your intentions are but isnt that what will happen if they keep the house?

Let them enjoy thier life and spend thier money how they wish!

I dont think they are going to listen to you anyway tbh!!

BitterAndTwisted

Long-term it's paying off the mortgage. Even though there will be repairs and maintenance to pay for. Rents have only one direction to go in. What will cost them £1k a month now could be unaffordable for them in ten year's time.

Why do they have so little equity in this house?

pivotalgubbins

Well, it sounds like they are getting incredibly helpful advice and support from their family - way to go!

My reading from your less than helpful layout of the situation is that I am guessing they are in their 40s (or maybe older), are concerned by the fact they over 75% of their LTV to pay off, may have a few unsecured debts on top, don't have a stunning combined income and might be looking for a way to enjoy their life without the burden of debt or demanding mortgage payments.

If their income is £55k, assuming the pension is £15k per annum, then the rental doesn't seem too extreme and maybe they are happy to do that and plan for their retirement differently. Maybe you should sit down and discuss it with them rather than claiming 'they are wrong'.

Given that you were boasting about a business you ran in another post - they are possibly hoping that their little genius might be able to look after them in their old age.

System

BitterAndTwisted wrote: »

Long-term it's paying off the mortgage. Even though there will be repairs and maintenance to pay for. Rents have only one direction to go in. What will cost them £1k a month now could be unaffordable for them in ten year's time.

Why do they have so little equity in this house?

second marriage, bad with money, credit cards

Bogof_Babe

Maybe they don't have any choice in the matter. You say they are bad with money, so perhaps mortgage payments have been missed and the lender is foreclosing.