Buying parents' house, dying Dad

missbiggles1

Newlyboughthouse wrote: »

Hi all. Bit of a complex one but bear with me! My parents owe £150k on their mortgage, and Dad probably hasn't got long to live - he is 60 and probably has lung cancer going by his horrific cough (his Dad died of lung cancer at 60). He won't go to the doctor as does not want to know. He just wants to enjoy life and when it's his time, it's his time. My mom is totally clueless with money and constantly gets herself into debt (just for background info for later), the mortgage is half in her name just on paper - she would be happy with whatever me and Dad decide I think.

We all want to keep their house in the family because he put a lot of blood sweat and tears into doing the house up. It is beautiful and we would hate to see it go to someone else, particularly as my young brother and sister have grown up and live there.

If Dad were to die, he says his life insurance will pay off £100k. Mom is not in a position to pay the mortgage with all her financial problems, so would be forced to sell the house.

What if Dad were to leave to house in the will to me? He would obviously only be leaving his half right? What would I be liable for?

What if I bought my mom's half?

The other option we have discussed is for him to sell the house to me. He would sell it to me for £152k enough to pay off mortgage and legal fees, and I would IOU him up to the value of the house, which would be paid by him living there rent free for however long it takes.

The thing I can't get my head round is which option would be most financially savvy for myself? I'm thinking leaving it in the will would save me from taking out the big mortgage (I am already paying the mortgage on my own house). Am I right? Not au fait with any legal implications so any legal eagle/finanical advisor input would be a huge help here.

Thanks in advance

Far more likely to be COPD with which he could live for many years. Whatever it is, it won't be helped by having you circling over him like a vulture!

Newlyboughthouse

duchy wrote: »

Ah but so is complaining your neighbour coughs too loudly .......same poster lol

Thanks for the troll reply Duchy.

I'm leaving emotions out of this thread with regards poster about Macmillan nurses - being dealt with separately thanks, my question was merely what would make more financial sense.

Re: the vulture comment, my Dad actually came to me as he wants the house to remain in the family.

If people could not post sarcastic/abusive replies would be great - thanks

duchy

Perhaps if you had shown any concern about either of your parents instead of plotting to go after his property and then wanting to charge rent.....not to mention trying to do your much younger siblings out of any inheritance then perhaps we wouldn't think you were a troll......at best

Financial sense would be to sell the house if your Mum can't afford the mortgage and is bad with money and her rent so when the money runs out she'd get housing benefit and wouldn't need to worry about maintain acne of the property .....just in case she has no one to help her with these kind of responsibilities.
Yes it is a pity your Dad didn't make adequate provision for you all but as he hasn't it alters matters. If he wanted the house to remain in the family he should have planned for it properly especially with two young children to provide for.
That isn't nasty it's fact and all the scheming in the world can't change that. You appear to want the house for yourself even though you are the only one who has another home and a mortgage and appear unconcerned of the financial impact that would have on your mother and her very young children. It is very distasteful.

whitewing

I don't think OP is a troll. I think he is just compartmentalising but it will all go to pot because you have to take into account the emotional side of a life changing experience.

Newlyboughthouse

duchy wrote: »

Perhaps if you had shown any concern about either of your parents instead of plotting to go after his property and then wanting to charge rent.....not to mention trying to do your much younger siblings out of any inheritance then perhaps we wouldn't think you were a troll......at best

Financial sense would be to sell the house if your Mum can't afford the mortgage and is bad with money and her rent so when the money runs out she'd get housing benefit and wouldn't need to worry about maintain acne of the property .....just in case she has no one to help her with these kind of responsibilities.
Yes it is a pity your Dad didn't make adequate provision for you all but as he hasn't it alters matters. If he wanted the house to remain in the family he should have planned for it properly especially with two young children to provide for.
That isn't nasty it's fact and all the scheming in the world can't change that. You appear to want the house for yourself even though you are the only one who has another home and a mortgage and appear unconcerned of the financial impact that would have on your mother and her very young children. It is very distasteful.

You really are vile. My Dad came to me as I am sensible with money and he trusts me to ensure the kids are looked after. Me buying the house would release her equity so she can pay her debts. You are clearly wanting an argument and I'm not going to indulge you any further. Any future comments from you, which will no doubt have the same poisonous tone, will be reported - you thoroughly spiteful person. I am not here to talk about the emotional aspects of this. What does me getting Macmillan etc have anything to do with my original post? This is a Money Saving Expert forum.

whitewing

Because I am of the understanding that MacMillan can point you in the direction of advice/benefits with their experiences of these kind of situations.

BobQ

missbiggles1 wrote: »

Far more likely to be COPD with which he could live for many years. Whatever it is, it won't be helped by having you circling over him like a vulture!

Newlyboughthouse wrote: »

Thanks for the troll reply Duchy.

Re: the vulture comment, my Dad actually came to me as he wants the house to remain in the family.

If people could not post sarcastic/abusive replies would be great - thanks

I can see that this is a difficult issue that needs to be resolved but your OP does come across as totally focussed on resolving the financial issues to your advantage. Only now do you say your Dad "came to you".

I too find it odd that your father is unwilling to get a proper diagnosis yet is prepared to make decisions on the basis that he will soon be dead. However, stranger things do happen.

How much is the house worth. Is it £180K or (£180K plus £152K)?

You need to establish what the ownership of the house is. Your comment that "the mortgage is half in her name just on paper" is absurd. If it is half in her name it is just that! Unless there is a legal document saying otherwise, your Mum owns half the house and is jointly responsible for the debt. You need to check but it is probably held as joint tenants in which case he cannot leave it to you without this being changed,

If it is held as tenants in common he should be leaving the house to your mother and trying to protect the interests of his dependent children.

Either way, the mortgage needs to be paid off and it is far better that it stays in your mother's name. If your Dad does die it may make sense for you to help out by buying a share of the house which would need you to own the house with your mother on a tenants in common basis. Whether the mortgage provider would agree is unclear, but you should keep your share as small as possible since you will be liable to CGT on the future appreciation of your share. So it would be best to restrict any share you have to the mortgage that your mother cannot pay. If she inherited £100K and did not use it to pay the mortgage off, then it would affect any benefits she might otherwise be eligible to receive.

You also need to bear in mind that if you are correct about your Dad's condition buying his share or all of the house would give him cash that he might have to spend on funding his own care if his illness was prolonged. Whereas the house would be disregarded if your mother was living in it.

Also you cannot just change the ownership of a mortgaged property without the mortgage provider agreeing.

lessonlearned

I'm not going to discuss the financial aspect of this post because I think you need professional advice on this.

I just wanted to say that nowadays cancer is not necessarily a death sentence. Treatments have moved on since your grandfather's time.

My father had half a lung removed in 2002 due to Lung cancer. He's now 88 and still going strong.

Insist your dad sees his doctor and gets referred for proper treatment.. 60 is no age to give up without a fight.

BobQ

Newlyboughthouse wrote: »

You really are vile. My Dad came to me as I am sensible with money and he trusts me to ensure the kids are looked after. Me buying the house would release her equity so she can pay her debts. You are clearly wanting an argument and I'm not going to indulge you any further. Any future comments from you, which will no doubt have the same poisonous tone, will be reported - you thoroughly spiteful person. I am not here to talk about the emotional aspects of this. What does me getting Macmillan etc have anything to do with my original post? This is a Money Saving Expert forum.

I think your remarks are uncalled for. All duchy has done is pointed out how your posts can be construed!

The best way of helping your family is to convince your Dad to see a Doctor.

If you step back and look at your posts, it seems that your Dad is coming to you as the financially sensible one and your advice is not considering the financial interests of your siblings. You may see what you are proposing as in their interests but at the end of the day the only one who benefits financially is you. This is not being vile etc, it is how your words can be interpreted.

Mattygroves2

You ned to find out or clarify a few things:

- is the property owned as tenants in common or joint tenants
- who does the life assurance pay out to if it is written in trust
- what other assets there might be in the estate to help settle the mortgage

If I was in your shoes I'd get my father to leave the property to my mother (assuming it is tenants in common) and let the life policy cover most of the mortgage. I would then raise enough money to pay off the rest of the mortgage by remortgaging my own house or using savings and then register a charge against my mother's house.

That keeps the house in the family for mother and younger siblings to live in, reduces your eventual CGT liability whilst ensuring you get your investment back when the property is eventually either sold or passes under your mother's will.

You then need to work with your mother to ensure she has enough money to live on and maintain the house when your father has gone. You haven't mentioned pension entitlement for example. Are you prepared to help her out whilst your siblings are still young ?