!!!! hitting the fan - advice needed, please.

Curv

My parents are named on the deeds. And bro's job is too far away for moving in with them to be an option. There's no danger of repossession but the fact that Dad is having to make payments he didn't expect to make is severely affecting his standard of living, to the point it's making him and my mother ill and affecting their relationship.

EdInvestor

The mortgage interest can be claimed against the rental income regardless of what property the loan is secured against.

If the son will leave, it might be sensible for the time being for the father to appoint a letting agent and let the property out for 6 months/a year or so that he can get some income coming in at least over the winter when there's little chance of a sale, to pay the mortgage.The agent will be able to handle and explain all the legal stuff and draw up proper tenancy agreements etc.

There is a good practical investment in property board at https://www.fool.co.uk with plenty of helpful experienced landlords contributing.

HugoSP

PasturesNew wrote: »

If I am reading it right. the brother-house is mortgage free. Thus no interest being paid on a mortgage. Thus any rent cannot be counted against the interest.... because the mortgage/interest is on your dad's house.

WRONG!

Sorry PN, but I think its impormtant that curv knows the situation. If her dad raised the mortgage on his own house to buy this one then HMRC may well allow the interest payments to be offsett against rental income. A lot of BTL investors do this as home owner mortgages are cheaper.

Getting a loan on the brother-house to pay off the mortgage on the dad-house seems a good idea - as this would at least ensure that if a repossession were the end point of all this, at least it wouldn't be directly on the dad-house (although if there were a shortfall, then he would have to pay that so he needs to be aware of that). Obviously only you know the current mortgage/tie-in/interest figures and the current value of the brother-house compared to the dad-house/mortgage.

He would most likely find this to be more expensive, as btl/investor mortgages are more expensive, and would be prohibitively more expensive if he didn't go for a fixed term arrangement.

I see two options.

1. Get the house in your dad's name and rent it to your brother - probably not an attractive option if he's been poor at paying the rent.
2. Get your brother out then either sell or rent the house out. If you can achieve this then leave the financial arrangements as they are.

It may sound cruel but I would be more concerned about your dad than your brother. If your bro can't manage his finances (poor credit rating and erratic mortgage payments), it's likely that any further efforts to bail him out will end up coming down around the ears of the well meaning family member concerned.

By being firm with your brother, you are probably in a better position to help your dad, who will no doubt manage his money well once he's back on an eaven keel.

I have a huge amount of sympathy for you all, as all you've done is to try to help him out and he seems not to realise that his actions hurt others.

macaque_2

Curv
This is a tragic situation but I fear you and your father are trying to solve the wrong problem. This is a human problem, not a housing one. If you can solve the human problem, the housing problem will resolve itself. If you don't, your brother will end up on the streets and you will feel sick. Very often, the solution to these sorts of problems lies in finding the right job for him. If on the other hand he already has a good job and is well motivated, a few days living rough might do him the world of good.

HugoSP

Macaque - good post!

Nenen

Curv wrote: »

...the fact that Dad is having to make payments he didn't expect to make is severely affecting his standard of living, to the point it's making him and my mother ill and affecting their relationship.

Does your brother realise this is the case? Does he care? What does he think would happen to him if/when your dad chucks him out? Or does he think your dad will never really do that and it's just an idel threat to try and get him to pay up?