Parents want to retire but still have a mortgage!?

Daniel54

Splodger wrote: »

Thank you for all your help, my parents income if they both retire will be around £1500/4weeks, and my brother is 33.

Mortgage is 58k
Pension if surrendered is worth £25k to £30k

Any help or ideas appreciated, thanks again.

Your parents cannot surrender their pension -they can take 25% of the value tax free.Is this the 25-30k to which you refer?

I hesitate to ask,but have there been specific circumstances why your parents have not been able to make provision to pay off the mortgage?

The default answer in these circumstances is to sell the house,take the equity and pay off the mortgage.I hope you are successful in finding an alternative solution.

dancingfairy

Ideally from your parents point of view they would perhaps be better off selling the house at market value and then using any profit to invest to produce an income. I doubt your brother would be in a position to buy the place off them though? on 10k he's not going to get a mortgage for the full amount and what about a deposit?
If they cashed in their pensions and used it to pay a chunk off the mortgage, then what? What income would they have to pay this new mortgage? What if the brother wanted to move out? or they fell out with him etc etc?
They could in theory gift him a percentage of the house and he could attempt to remortgage his part. The problem with this is it will deprive them of their assets and this could affect care home fees and potentially benefits. On the other hand he could potentially buy a share in the house but I can't see a lender offering him a mortgage on part of a house (it doesn't really sound viable from a lenders point of view as who else would want to own part of a house)?
What plans did your parents originally have for paying off the mortgage and retiring?
df

Annisele

Have your parents spoken to their existing lender? The lender might be prepared to offer something that it wouldn't offer to new borrowers (on the grounds that it would really rather not have to repossess if it can avoid doing so).

I'm hoping I don't cause any offence with this, but is there any possibility you could help your parents with a gift/loan of £30k or so? You seem perfectly happy with the idea of them giving your brother £100k when they clearly don't have another £100k to give to you, so I'm wondering if they think you're reasonably well off (of if they've already given you a similar gift).