Parents Endowment/IVA Nightmare

Dmen79

Hi All,

I'm new to posting here, but a regular reader of the forums.

My Parents are in quite a grim situation. Up the proverbial without a paddle by all accounts. The basics are they are subject to an IVA which has been extended for a further year (bit of research here shows that this is common). Their interest-only mortgage is due by the end of next month with some terrible endowment performance they have a sizable difference to make up and have no chance of doing so.

My Dad has tried to extend the terms of the mortgage for a further 5 years with his current provider until he hits retirement age when his pension policies mature and work issued shares mature also. The mortgage company declined however and have given an extension until January to find the finances to cover the shortfall. He has enough investments that can cover the shortfall, but getting past the next five years is the problem.

He is trying to secure a mortgage to switch to, but I'm assuming his credit rating is at a level that sets alarm bells ringing. So my brother and I are trying to help them through this and have come up with a few potential ways of doing so.

Firstly, I am offering to go into a mortgage with my Dad on the house to see if my clean credit history, salary and age will help. Problem being that I already have a mortgage on my own house, although I am trying to sell it ASAP. That may take some time as work needs to be done in order for it to be marketable. What would be the best option here? Go for the mortgage as a joint applicant (if I can), or try to act as guarantor? Is it possible to be on two mortgages? Should I try and move my mortgage to a buy-to-let to free myself up if this is the case? I have no intention of owning my parents house, this is not an investment move for me, just need to help them out of their situation.

Secondly, my brother is a contractor and is set up as a limited company. He has suggested that he buys the house (through his business) on a buy-to-let basis to clear the mortgage shortfall. He will take 'rent' to cover the mortgage repayments on the BTL mortgage and transfer the house back to my parents when all the financial mess has cleared up. Is this possible and are there cases that this has been done?

My brother and I don't live with our parents, and I don't live at my mortgaged house (long story that one). My fiance has bought our current house (mortgage in her name) and the intention is to sell my mortgaged house to get us on a decent financial footing for married life (July next year!). We spent all our carefully scrimped wedding fund on the new house/deposit as we had to move very fast to get the perfect house for us. We are now down to the bare bones and had planned on using the money from the house sale to cover some of the wedding costs.

This is the best I have come up with, any other ideas that I should explore?

Thank you in advance for any advice you can give.

Cheers, Dave