Parents selling house because of debt

Voyager89

Hi

Maybe this is just a chance for me to vent a bit but I just fancied posting something. Also this could be the wrong place, if so moderators please move the thread.

My parents revealed to me today that they'll be selling our house. The reason for this is because for the last 10 years we've been operating at a £700 loss every month.

Why this happened is because my Father lives away from home Monday-Friday for his job. He therefore incurs living expenses when he's away that weren't budgeted for when we bought the house.

I can't believe it because this is all news to me, not only that I don't understand how they could have allowed that to go on for so long and be ok with it. Apparently it's been possible because they have a mortgage that gives them an unlimited overdraft as they pay the mortgage. So simply put as the mortgage went down, the overdraft went up. Basically making no change to the money owed. Now the mortgage will be over soon and they will have to settle the overdraft. Because of their age (both still working) they would be unable to get another mortgage so they have no choice but to sell and downsize to another property.

I understand that now that is their only move, but I'm so !!!!ed off we are in this situation in the first place. Both my parents have good jobs and have been earning at least 70k between them over that time. I have no idea where the monies gone.
Assuming the take home pay for both of them is around 5k per month, they've managed to spend 5.7k per month consistently for 10 years! How I have no idea.

Not only that we bought the property when it was around 100k more than the small house we had mortgage free 10 years ago. We also had a relative die who gave us (I don't know the exact figure) around 100k.

They are both seem pretty bad with money, but not in lavish things. Just by general spendings. Takeaways, sky box, bills for the house (always got the heating on), health insurance, pets, 2 cars (but not good ones).

I'm just stressed because we're selling the family home, one that I have spent most of my memorable life in to downsize to something that will most likely be a 2 bedroom flat nearer my Dads employment.

I live and work in London in a job that pays pretty well in comparison to what I could get, but I work unsociable house which I have grown to hate. Property prices in London are stupid so I struggle to get on the ladder (I am saving, 27k so far), so I'm not invested in London or committed there. I've always had that safety net that I could come home, now it seems that it's mostly gone away. Although they have said that the spare bedroom would be mine when I needed it. It is nice, but it's a 2 hour drive away from everything I've know.

Like I say maybe I just needed somewhere to vent but I'm upset at all this. Especially when I consider most of this completely avoidable if they were better with money or had they done this 10 years ago when they realized it was unsustainable.

Any thoughts would be much appreciated

Kind regards

dimbo61

Your mum and dad will not be kicked out of there home once the mortgage term has finished, lenders are now required to give customers time to either sell the property or remortgage elsewhere.
Can you sit down with mum and dad and look at what they are spending £5,000+ a month on !

getmore4less

Sounds like a Barclays mortgage, if it is a Barclays I have mentioned this flaw in the reserve before.


They need to do a financial review because the mortgage has in effect been interest only, selling and downsizing won't fix the spending issues.

What's the pension situation something will have to give sooner or later.

System

You keep saying 'we' and 'our house'. Are you living there? If not then it sounds like you are more upset that there won't be a house coming your way eventually.

McKneff

I cant see for a second why this is any of your business to be honest.


Its not 'your house' it is their house.

ViolaLass

Are you upset for your parents at all? It's sounding very 'me, me, me' at the moment. Much as it's their fault, this can't be easy for them.

stator

ViolaLass wrote: »

Are you upset for your parents at all? It's sounding very 'me, me, me' at the moment. Much as it's their fault, this can't be easy for them.

That's an unfair assumption. May just be sentimental

Thrugelmir

Voyager89 wrote: »

Any thoughts would be much appreciated

Their money. Their choice. Perhaps its simply a case that their plans of 10 years ago didn't work out.

Nor you seem concerned that your mother and father have had to live apart Mon-Fri for the past 10 years. Tis the season of goodwill. Think of others before yourself.

Boogiecat

Sit down with them, and a large pad of paper, a pen and a calculator. Write down their expenditure , monthly payments etc versus income, and see what's left after all the bills are paid for food etc. See what can be reduced - eg change service provider for elec, gas, phone - or which luxuries to get rid of - like Sky. Are they on a water meter? If not, get one fitted. It sounds like they've buried their heads in the sand for some time. See what's do-able and take it from there.

jamesd

Voyager89 wrote: »

My parents revealed to me today that they'll be selling our house.

That's sad. Have you agreed to the sale or have they taken legal action to compel you to sell your interest in the property. the interest registered at the Land Registry when you agreed with them to buy your property and for which you presumably paid some deposit, some of the monthly payments or both to get your share of the property. Or is it not actually your property at all but rather the home you grew up in? I assume the latter, but it is worth being sure in case say the £100,000 was a gift to you and led to you acquiring a substantial interest in the property at that time, with your parents holding the property portion in trust for you until you became an adult.

Your parents appear to have chosen to operate the mortgage as if it was effectively an interest only mortgage. That presumably allowed them to spend more on such things as day to day living expenses including a house that presumably kept you in a table home while you were growing up, even though your father was working away from home.

While the spending level seems quite high we have no idea of the living costs and those could have included things like private schooling for you.

It's an entirely legitimate choice to use an effective interest only mortgage provided you're willing to sell once the mortgage comes to an end, as they appear to be planning to do now that is happening and they no longer have a need for a larger family home that they would have used while they had children living at home.

Given trends in property prices it's quite possible that after selling they will have made a substantial capital gain from owning the larger property and will free up significant money when downsizing.

Voyager89 wrote: »

Both my parents have good jobs and have been earning at least 70k between them over that time. I have no idea where the monies gone. ... Assuming the take home pay for both of them is around 5k per month, they've managed to spend 5.7k per month consistently for 10 years!

Have they been engaging in tax evasion as well to get that £5k a month of income? Basic rate income tax and employee NI would take it to nearer 4.4k than 5k. That's assuming no pension contributions and they probably have been making some of those.

Voyager89 wrote: »

We also had a relative die who gave us (I don't know the exact figure) around 100k.

You say "us". Were you a named beneficiary in the will and did you get a share of the property when you money, held in trust for you by your parents, was used to buy this property? Or by us do you mean one or both of your parents was/were the named beneficiary?

Voyager89 wrote: »

I'm just stressed because we're selling the family home, one that I have spent most of my memorable life in to downsize to something that will most likely be a 2 bedroom flat nearer my Dads employment.

For them, that seems like a sensible move, to increase the amount of time that they can spend together now their focus isn't on raising a family and the needs of that family.

Voyager89 wrote: »

I've always had that safety net that I could come home, now it seems that it's mostly gone away. Although they have said that the spare bedroom would be mine when I needed it. It is nice, but it's a 2 hour drive away from everything I've know.

It's still a safety net. Wait until you find that both of your parents are dead if you want to know what it's really like to lose that safety net. That's a point at which it can really hit home that you are the sole person responsible for your fate. for the moment they appear to be doing something sensible to meet their needs, having met yours while you were a child.

Voyager89 wrote: »

I'm upset at all this.

That's understandable but notice that I've described their life in terms of caring for family while needed and now caring for themselves. Unsustainable long term decisions to benefit family life are not uncommon.

Jhoney_2

I am very sorry to hear that your parents have decided to sell the home you cherish.

I have to say however, that you seem to have taken little interest in the home you loved so much and should include your own inaction in this as you do not appear to have had a conversation with your parents around preserving it for the family in the future. If that's what they would like, I hope it's not too late.

Are there siblings? Could you do something finnancially to help? Your father doesn't seem to have spent a very good deal of time in the home 2/7 days...~I feel for him in particular.

All the best