Should I raise a mortgage to help elderly parents?

louball

Hi,

Just wonder if you could give me some wisdom about my predicament.

I have elderly parents in their early 70's. They have outstanding debts and currently live in a retirement complex. They own their own home but can't afford to pay the annual maintenance fee as well as the management fee which is why they are selling. They have outstanding debts of around £25k.

They really need to be in a freehold property as they don't have the savings to put forwards for a leasehold property should there be any repairs required. Ideally, they need to be in a bungalow as it's freehold and all on the same level. Trouble is with what they will have left over from the sale after moving fees, solicitors fees, paying off debts etc, the amount they will have left over will be around 130k tops. They want to stay in their locality, which is cheap enough (i.e. it's not London), but for what they want they can't get. Flats would be the only option but they can't afford to pay the leasehold.

What I'm wanting to find out from you is whether it is worth me applying for a mortgage for say around £100k so that I can go in with them on a bungalow. It will get me on to the property ladder and when there is no need for the property I can sell it in order to buy a family home of my own. I am 32, I currently rent, live and work in London. I have two children and husband. I do not intend in living with my parents but I am their main carer should anything happen.

I need to know what the potential pitfalls could be, whether its the right thing or the wrong thing to do.

I really don't know what to do for the best - keep out of their predicament or get involved and help them?

Thanks,

Lou

elmer

Your parents are not elderly. they may live another 20 years, perhaps they should ask the council about sheltered accommodation and rent. They can clear their debts with the capital and still have a large amount over for their lifestyle.

elmer

Fen1

I would like to ask a few questions first.
How did they get into debt?
How had they planned their retirement finances?
How had they planned to fund their retirement home?
How financially savvy have they been over the years?

As the previous poster has stated, early 70s is certainly not old. They've only been retired a few years ( if they went at 65 rather than early).

louball

Ok, correction early 70's may not be "elderly" and apologies for any offense but they are physically elderly. They both have health issues which has restricted the way they live.

Thanks Elmer - I have enquired about sheltered housing but not thoroughly pursued it. Will take a look.

Fen 1

How did they get into debt? getting behind on payments, have far more outgoings than incoming
How had they planned their retirement finances? Nothing as far as I can see has been planned. My mother has a pension and my father has a government pension credit
How had they planned to fund their retirement home? I'm not sure
How financially savvy have they been over the years? my mother is the saver and my father is the squander-er. In truth Fen1, not very :-(

Fen1

My concern is for you and your children. Getting into debt with people who are already in debt, and have no financial sense, sounds like a truely awful idea. Your duties are to yourself and children, not your parents. After all, they are grown ups and have had 40 odd years to sort out their finances. If they haven't been responsible for 40 years are they seriously going to change now?
Give them advice re. shetered accommodation and for them to get rid of their debt ( debt which will go up and up and up if not sorted pronto ).
Do not got into debt because of them.
Do not squander your children's future.

I fully appreciate the burden you feel, and I am very sorry if I sound harsh. This is just my opinion, nothing more.

Annisele

Freehold properties aren't necessarily any cheaper to run than leasehold ones. Freehold properties still need repairs!

I agree with others; financially linking yourself to people who are struggling with finances sounds like a bad idea. Plus you'd likely struggle to even get a mortgage in the circumstances you describe - if all three of you are going to own the property, all three will need to be on the mortgage. Many lenders have maximum ages, and while your parents are definitely not elderly their age together with their credit issues may prevent them from getting a mortgage.