Helping Parents With Remaining Balance Of Mortgage - Possible Options?

AHumanBeing

Hello MSE Forum

I am trying to help my parents out with the remaining balance of their mortgage, which has ~60 months left at £800 per month. I am trying to help them as they are in a considerable amount of debt and if they did not need to pay the mortgage each month they could put that towards repaying the debt.

Unfortunately I cannot afford to pay the £800 per month, for 60 months, and I was hoping to receive opinions on the following options or suggestions for other options if they exist:

• Approaching the Halifax bank and asking them to extend the mortgage term and to reduce the monthly payments so that I can pay the monthly payments on the remaining balance.
• Buying their house from them, from my understanding this will lead into complications with capital gains tax and denial of assets(I can't remember the correct name for this)
• Other options?

Thank for reading
AHumanBeing

getmore4less

How much can you afford?

How big are the debts?

CLAPTON

depends upon the full details


what are their debts?


how much can they afford to pay
what do their credit files say about them


what is your own situation
are you a home owner
salary
credit rating
how much can you afford

lonestarfan

When you say they have 60 instalments left of £800pm do you mean that if they pay the required rate/amount per month then in 5 years time their balance will be nil?
Have they got a repayment mortage and the term has 5 years remaining to run?
How big are the debts they need to pay off.
What age and income do they have.
Are all their debts up to date and managed properly and well? Eg no arrears and Ccjs.
My understanding is an extension of term requires a full affordability assessment under MMR rules, although someone will correct me if I'm wrong.

When_the_going_gets_tough

I think your parents should seek some professional debt advice. Mortgage payments are priority debts and should be placed ahead of consumer credit. It might be better for them to enter a debbt management plan or other debt solution.

CLAPTON

When_the_going_gets_tough wrote: »

I think your parents should seek some professional debt advice. Mortgage payments are priority debts and should be placed ahead of consumer credit. It might be better for them to enter a debbt management plan or other debt solution.

without any facts, it's a bit hasty to suggest they should trash their credit worthiness

Senior_Paper_Monitor

Professional advice needed with full details available - and that doesn't mean a 'debt management company'.


An experienced mortgage broker will normally cost you nothing to give a review of their and your circumstances and the routes open to you - and are probably the best source of advice at this stage.

mrginge

Why don't you just pay off their other debts and let them carry on paying the mortgage?

AHumanBeing

Hello, thank you all for replying, I have tried to the write answers to the combined list of questions below.

I think the next step for us is to make an appointment with a mortgage broker and see if they have any options.

I was also thinking about phoning a debt charity (StepChange, etc.) to see if they could offer any options, but I'm not sure if phoning them will help.

How big are the debts?what are their debts?
~100k Credit Cards
~30K Mortgage
~14K Vehicle

how much can they afford to pay
£0

What age and income do they have.
One is in their 50s other in their 60s. Income is ~20k and the other is self employed, I'm not sure what their income is, usually its just enough to pay the mortgage and the minimum credit card payments

what do their credit files say about them? Are all their debts up to date and managed properly and well? Eg no arrears and Ccjs.
I am not sure about their credit files. All their debts are up to date, no arrears or CCJs.

what is your own situation? are you a home owner?
Yes, I own property with my partner

salary?
in the £30-£35K range

credit rating?
Not sure, something I will need to find out.

How much can you afford?
At the very most ~£500 per month


When you say they have 60 instalments left of £800pm do you mean that if they pay the required rate/amount per month then in 5 years time their balance will be nil? Have they got a repayment mortage and the term has 5 years remaining to run?

The mortgage is a repayment mortgage and has 5 years to run and yes after 5 years the balance will be nil.

Why don't you just pay off their other debts and let them carry on paying the mortgage?
My thinking was, pay off the mortgage first then at least they will still have somewhere to live, once its paid off then (somehow) tackle the debt.

getmore4less

How much is the house worth?

Where has all the debt come from?

14k car debt on 20k income is not sensible.

Dave_Ham

How much is the house worth?


As this crucial fact may affect the information provided.