Am I bailing Dad out?

EccentricRavenJewellery

Hi guys,

I thought I'd pop on for some advice.

Recently my father retired aged 58. He lives alone since my mother left 15 years ago, but has a long-term girlfriend in another city. Late last year, we made an arrangement between my father, my then partner, and myself that when our tenancy ran out, we'd move into Dad's and pay rent in order to help him pay his mortgage.
He chose to retire earlier than late because of changes to the retirement and redundancy settlements which would have negatively affected his longer-term income, which seemed a wise decision at the time. It would have allowed us to save for a property of our own, and Dad to clear the mortgage a bit faster/in a bit more comfort.

I have since left my partner and am currently living with other relatives, paying a reasonable amount of rent for the bedroom I occupy. I enjoy living with them and they say they enjoy having me here and I can stay as long as I like.

Dad and I had a talk where he asked me to confirm that I would be moving in with him after my exams (I'm a student), because if not, he'll have to sell the house. Fair enough, I thought, his pension won't stretch to cover the mortgage and a reasonable standard of living + the activities he likes to do (hillwalking, etc.).

Then I had a bit of a moment of truth- in addition to the mortgage, he also has a secured loan which he cannot clear with his retirement settlement and cannot service the repayments on. At this point, I don't know what the extent of the debt is, nor how great the monthly shortfall. I do know however that the debt is 8 years into its 20-year term. So he took the loan out when I was 14ish.

He asked me recently how much money I had left over from an inheritance settlement a few years back- then when I said (a couple of grand at best- I like a safety net), said 'Never mind, that wouldn't make much of a difference anyway'. (I spent the majority of it on three years of Uni tuition and used some of it to supplement living expenses). I believe he was going to ask me for a loan, which I would have probably done- I've lent him money in the past, albeit smaller sums of a few hundred pounds, and he's always paid them back, although sometimes he has a tendency to buy me things and then knock the value off the debt.

His plan for getting himself out of the debt is that as well as me moving in with him and paying rent (£50 more than I'm paying my other relations at the moment, but I do get an en-suite bathroom), I will also find him another tenant for the other spare room, "preferably a nice quiet mature student or postgrad". He doesn't want to go back to work if he can avoid it.

I'm trying to be a good daughter and will not go back on my promise to help him out, but I have some concerns:

1) I don't want to be living there if he does have to sell the house or is repossessed (he has given no indication of this being a possibility, but I suppose one has to be ready for anything) and finding myself homeless at short notice.

2) He doesn't seem to have the will to exert himself in order to reduce the debt. I don't mind helping him advertise for a lodger, since I am at the University, but I feel he ought to be doing something himself to improve his financial circumstances. I don't mean that he should be wearing a hair shirt, and I had no problem with the fact that he treated himself to some new gadgets with his retirement settlement (not all of it), but I think he should limit himself somehow, after all, debt is achieved by living beyond one's means, and surely he should start making adjustments now before it really bites?

3) I don't know how to recommend that he goes back to work. I think eventually it will become apparent to him that he will need to increase his income (or retirement will bore him), but what if by that point he's been out of work so long that no employer will want him? This is why I'd like to encourage him to find a job- even something like tutoring or pizza delivery- as soon as possible.

The reasons I haven't spoken about my concerns to him are manifold, but the primary one is this: we have a lot in common in terms of out personalities, and one thing I can't stand is unsolicited advice about my lifestyle and decisions. I know exactly how I'd feel as an intelligent person having another person lecture me about what I should be doing (Well, as a 21-year-old, I get it quite a bit!).

I wonder, though, whether it mightn't just be easier to sort things out with/for him; perhaps he is too old to change his ways, or perhaps it's a one-off which was brought about by some circumstance I was unaware of as a teenager, and now he's paying the price.

I had thought of getting a second job, saving a few grand, and making a gift to him on the basis that he used it for an overpayment on either the mortgage or the secured loan, whichever has the higher interest rate. The mortgage has only a few years left to run.

But equally, I don't want to be treated like a mug or sacrifice my own finances for his sake, when I have a foundation for my future life to lay down. Does that make me selfish?

Obviously I am not moving in with Dad purely out of the goodness of my heart; it has benefits for me too (at the risk of sounding very mercenary- Dad and I have discussed these benefits)
- Even though I'll be paying more than I am at my relatives', I'll still be paying less than a flat of my own
- I will have the comfort of knowing Dad's safe in his home in his old age
- Other things being equal, when the time comes, I will have a property of my own to live in/raise some capital/rent out (I'm Dad's only biological child and while I think he will leave something to my elder stepsister, I don't anticipate him leaving her half of everything).

National_Debtline

Hello there,

I think, before you make any solid decisions, you should try and glean a comprehensive understanding about your father's situation - and specifically the mortgage and secured loan. The reason why this is important is that the property could be at risk of repossession if the secured loan isn't up-to-date. A secured loan is simply a second mortgage, as such the repossession rights of a secured loan firm are the same as the mortgage company's.

The general approach to prevent repossession is to ensure that the regular instalment is met, and that a tiny bit extra is paid each month to reduce the arrears over a gradual period of time, this can potentially be over the remainder of the loan term.

As you can see, I would be very keen for you to be fully aware of the circumstances so that you can make an informed choice. In addition, if there are serious issues with arrears we (or any other debt/housing advice charity can assist you and your father in keeping the property.

I appreciate the situation is a little ambiguous, please feel free to update us with further information when you can. In the meantime, please familiarise yourself with our mortgage arrears fact sheet.

Best wishes,

David @natdebtline

7roland8

Hi - coming at this from a different angle as we have put two sons through uni and now face benefit cuts as hubby failed ATOS medical - so very limited fuinds in next few weeks/months/years.

We own our house so our bricks and mortar are safe but youngest son now thinking of moving out to start his own life. We would not dream of stopping him or making him pay more rent that was necessary - he's only been working a few months and has lots of travel so apart from buying food all he contributed to was council tax.

I look on it that my two sons need to find their own way in life and save for deposits or rent or wnatever. I know they have offered to help through our bad patch but unless really desperate we would not ask or take anything.

It seems your dad is relying a bit too much on you for support and I think you half feel that too - as you say he should be helping himself more. To expect you to pay more rent than you are now seems most unfair.

As you also say about him now 'paying the price' - that si what we arew doing as we probably spent more than we should bringing up the boys on a low income and just overspending here and there - so now have cards to clear as well - but that is our problem - not theirs.

pleasedelete

We would all love to retire at 58 but few can afford it. Sounds like you Dad couldn't. He needs to get a job- be has a good 7 years minimum left of working life. Working full time for a couple of years may be enough to pay the loan? Are he and partner likely to have children?

Wilkins

From your description I think your concerns are valid. He clearly is not managing his financial situation responsibly. It is not your job to do it for him.

You are happy where you are, so stay there. He needs to either sell the house, get lodgers on his own initiative, or get a job. By all means give him your opinion if he invites it, but don't help him out financially and don't expect to inherit the house.

SophiaMerry

Hi there guys- had to re-register as was banned for making company name my username (didn't read Ts & Cs properly when I joined 3 years ago).
Just wanted to say thanks for the advice.

To answer your question, pleasedelete, no, he and his partner are not going to have children- she has her own (grown up now, from a previous marriage) and he has me, and she's medically unable now.

And Wilkins, I appreciate your advice to stay where I am but don't feel I can go back on the promise- apart from the financial impact on Dad it would make things very difficult

-taff

I would just go and tell him your concerns and ask your questions of him.

BILLIE

I think you both need to lay your cards on the table. There could be a lot more debt than you are aware of. Why does he not consider downsizing and maybe clearing the loan and reducing the mortgage - I appreciate without work he wouldn't be able to start a new mortgage, but surely selling should be an option. I too have sons who went through uni and due to not being able to help them as much as I would have liked they self funded themselves. I would not expect them to bail me out - I will have to work longer but understand daughter father relationships - I would have probably thought of doing the same for my dad!! Good luck, but please don't put yourself in financial jeopardy as he does have other ways of helping himself x

bouncydog1

Oh and I are in our 50's putting DD through Uni and then financing masters. That is our choice and we would not dream of her helping us. Your father needs to wise up quite frankly - at 58 he is still well able to work and being a parent IMO does not involve an expectation of payback.

You have no guarantees whatsoever that your father will leave the property to you - he may decide to sell and spend the proceeds with his partner.

He may not understand what he is asking of you so I think you need to tell him that you are fine where you are and will help him place an advert for a lodger, but you don't want to make any commitment as to what you are going to do after Uni. You could easily meet someone and end up living overseas for instance.

Good luck you sound as if you have your head screwed on - keep it that way and don't allow yourself to be pressurised by your father.

19lottie82

I'm sorry but I agree with the others..

You told us your Dad is 58 and "doesn't want to go back to work, unless he can help it".

I understand that. I'm 32 and if I could help it, I would prefer not to go to work every day either, but you know what, I have bills and a mortgage to pay, and so does your Dad!

He's being really cheeky asking you to move in with him and help pay his bills and debt.

Even if you do move in, you can't guarantee you'll be there forever, or even x years. What would happen if you meet new partner and they want you to get your own place? What will your dad do then?

You need to sit down with your Dad and help him work out a plan that will let him pay his bills, and keep his house. I guess this will involve getting a job, and ideally getting a lodger too.

It's not fair he's pulling a guilt trip on you so he can continue to live the good life.

in_need_of_direction

Not wishing to be flippant but I'm 46 and every Monday don't want to go back to work unless I can help it. Like those merry little men sing "I owe, I owe so off to work I go". While I fantasise about my children making a fortune and keeping me in some style, I couldn't accept this happening from their 9 to 5. Your dad seems to be oblivious to the fact that your living arrAngements were different when the plan was first discussed. You're happy where you are, you're living more cheaply so why change. The danger in moving in and propping up is that should your lifestyle subsequently change, new partner, etc., you could find that there is an over reliance that makes your choices more difficult. You also have a prudent approach to money management, is this compatible with what he's asking of you? As I know to my cost, giving someone else's values or mindset precedence over your own does not make for peace of mind.