Father In Mortgage Arrears

princeofpounds

There are a few structures that might help you all deal with the situation, but none are going to create money out of nothing.


The only value you can add is refinancing the Blemain mortgage, assuming that it is priced at a high rate (you haven't actually said). And it might cost money to do this.


The simplest, as everyone has said, is to sell and downsize. But there are other possibilities, perhaps.


You need to be very honest with yourself, with us, and with your father about what you all want to achieve.


Firstly, what is your father's objectives? They are paramount. Presumably he wants secure tenure for the rest of his life. He might also want to stay in the same property. He might also want to leave an inheritance. There might be other things. Think about it, discuss it, rank them.


Then, as a secondary consideration, what does your wife want? Does she want to own a property? Does she want to own that particular property? Does she want to live in that property?


Then, tertiary, you can think of yourself


Then you have to be open about your constraints. What can your FIL really afford? Can you really afford a second property? What can you afford in terms of one-off lump sums, mortgages, or ongoing payments?


So, some options to consider within that framework of objectives and constraints:


- FIL downsizes
- FIL refinances Blemain with an equity-release product that doesn't require ongoing payments but instead rolls up interest into the principal. Could be expensive and leave little behind, but would keep him in the house
- You and/or your wife refinance the Blemain loan via a private mortgage, perhaps backed by your own funds or a mortgage on your own property.
- You and/or your wife become co-owners, refinance the mortgages. Beware stamp duty, also having elderly and non-elderly borrowers on one mortgage can be a bit complicated (but possible, I have done it myself in the past).
- You and/or your wife become full owners, with a sale and leaseback transaction. Keep you FIL in place, but ask for rental payments (may well have to be sub-market rates).


etc.

xylophone

FIL is 72, unwell, and in dire straits financially.

Why does he not sell the house, repay his debt, and buy a property suitable for his needs?

AnotherJoe

Agree with the other posts. Sell, pay off debts, downsize so he can live within his means.
And then take over, if you can, his financial affairs so he doesn't do it again.

Mojisola

AnotherJoe wrote: »

And then take over, if you can, his financial affairs so he doesn't do it again.

Look into Power of Attorney.

moneyistooshorttomention

The thing that's striking me (besides agreeing the consensus of opinion that its time for him to sell and downsize) is the way he took out this massive loan - and at 62 years of age!!!

What on earth did he do with that money? Is the house a massive one that needed shedloads of work and that is what he spent the money on? Or has it just been "blown" with nothing much to show for it?

So it's also a factor to take into account as to how well (or otherwise) he is going to be managing his money from here on in. Otherwise he could take the sensible option and downsize - only to turn round and take out another large loan behind your back and blow that too and all that hassle of moving would have been for nothing - as he'd land up penniless anyway.

peld

if you are wealthy enough to have 4 mortgages why dont you just pay the debt off.

Dan-Dan

peld wrote: »

if you are wealthy enough to have 4 mortgages why dont you just pay the debt off.

Too simple , wouldnt leave OP with big enough chunks of the pie when the time comes , especially if FIL loves to go spend money he hasnt got

Thealoeverabusiness

Thanks to everyone for their considered advice and perspectives. Just a few additional bits of information for clarity.

Marlipanda - The thought was for my wife and I to get the mortgage, not my father in law. Also, you are right in thinking that inheritance is a consideration as he wants to be able to leave something to his children and grandchildren. And if I can add to our property portfolio, then all the better.

Nubbins - The property is in London and unfortunately £250K doesn't buy much, although we are not complaining.

Princeofpounds - Ideally he would like to stay in the house as he has been there for over 40 years. And thanks for your thoughts.

Moneyistooshortt - He used it to keep his business solvent as he did not know his business partner was stealing from the company.

Pelf - We are not wealthy. Asset rich and cash poor, maybe, but definitely not wealthy.

Sell, pay off loans and downsize looks like it tops the list. Big thanks to everyone.

marksoton

Thealoeverabusiness wrote: »

Thanks to everyone for their considered advice and perspectives. Just a few additional bits of information for clarity.

Marlipanda - The thought was for my wife and I to get the mortgage, not my father in law. Also, you are right in thinking that inheritance is a consideration as he wants to be able to leave something to his children and grandchildren. And if I can add to our property portfolio, then all the better. Dear me...

Nubbins - The property is in London and unfortunately £250K doesn't buy much, although we are not complaining.
He doesn't need much....
Princeofpounds - Ideally he would like to stay in the house as he has been there for over 40 years. And thanks for your thoughts.
I'd like a palace, doesn't mean i can have one...
Moneyistooshortt - He used it to keep his business solvent as he did not know his business partner was stealing from the company.
Irrelevant...
Pelf - We are not wealthy. Asset rich and cash poor, maybe, but definitely not wealthy.
Many would disagree. Besides, giving up one generally leads to the other....
Sell, pay off loans and downsize looks like it tops the list. Big thanks to everyone.

Seems like the most sensible option...

littlemissrach

Mojisola wrote: »

Look into Power of Attorney.

Just a quick pointer about Power of Attorney, it has to be done when someone understands what they are signing up to and registered through the solicitor.
The big point really is that it only gets 'activated' once someone lacks capacity to make decisions around their finances, you can't just take over their finances through POA before that time.
If you're wanting to support FIL whilst he still understands, with his agreement you can look into Appointeeship to assist in managing finances

I'd agree with others about selling and downsizing if it's possible, rather than just moving a problem somewhere else. Good luck