Parents mortgage problems following redundancy - suggestions?!

1983JK

Hey all,

I wasn't really sure which section of the forum to post this, if there is a more suitable location please let me know and I'll move.

I'll try keep this as concise and focused as possible...

Due to historical matters my parents managed to find themselves in a situation where there owe £20k on their mortgage, with only my dad in employment, at age 68. He had a reasonable job and they were on track to pay it off if he worked until he was 71

Unfortunately, he lost his job a few weeks back and being realistic may struggle to get a job at the same rate of pay given his age.

They've been looking at different options, including equity release but can't seem to find a reasonable option that will allow them to remain in their house without surrendering a serious percentage of the value.

Not unique to them, but my dad has worked hard for many years and is loathed to fall at the final hurdle and lose anything he's managed to accumulate. I know they'd always envisaged having something to show for themselves and pass on as inheritance, something which previous generations haven't managed to do.

Does anyone have any suggestions as to what options they may have for equity release, or methods to pay of the remaining mortgage?

At a push I could possibly attempt to find some money through selling things or remortgaging but may only get £10-15k and would stretch me financially.

Any advice or suggestions are welcome.

Mojisola

1983JK wrote: »

At a push I could possibly attempt to find some money through selling things or remortgaging but may only get £10-15k and would stretch me financially.

Could you help towards the monthly cost of the mortgage - document your contribution as a loan so that you can get it back if the house needs to be sold to pay for care.

tacpot12

What pension provision does your dad have?

If he has any sort of personal pension, cashing it in would be one option to get hold of the money to clear the mortgage. Does he have any final salary pension that would pay him a lump sum?

Have you looked at L&G's Lifetime Mortgage Option? This is an Equity Release product, but it is one of the better products to my mind. It's quite a flexible product, they can borrow £20K to clear the mortgage now, but dip into and withdraw other lump sums at a later date if needed.

1983JK

Hey,

Thanks for the responses so far.

Contributing to their mortgage wouldn't be impossible but I already have a lot of financial commitments, spreading the £20k over a longer period would be better for me.

As far as pensions, both parents have a state pension, I don't know what the income is off the top of my head but can find out..

xylophone

He had a reasonable job and they were on track to pay it off if he worked until he was 71

Does he have no pension provision other than the state pension?

Is he able to find any kind of work to help pay the mortgage?

Is your mother?

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1983JK

He has no private pension at all, only state.

He's currently trying to find work on a freelance basis (estimator in construction industry) but not had much luck so far

MovingForwards

How did your dad lose his job? Redundancy? End of a fixed term contract? Fired?

How much is the property worth? Can they downsize?

How much are the monthly mortgage payments? Some of their pension plus a small helping hand from you / siblings could probably cover it.

Are your parents in receipt of the state pensions or were they deferred? Are they claiming every pension top up / benefit / discount available?

MovingForwards

Just noticed your title says redundant, is he not getting redundancy pay, notice, holiday etc?

1983JK

Thanks again for all the replies.

Redundancy was probably the wrong word. Although he's been working solely for the same company for 3 years he has been working as self employed, so no redundancy package.

The property is probably worth in the region of £350k. Downsizing could be a possibility but they've given their blood sweat and tears to renovate the house, leaving it would need to be an absolute last resort. My dad would need to be forcibly removed against his will, it's everything to him.

They are currently receiving state pension, nothing was deferred. Combined they get approx £1400/month.

Thrugelmir

1983JK wrote: »

Downsizing could be a possibility but they've given their blood sweat and tears to renovate the house, leaving it would need to be an absolute last resort.

Needs must sometimes. Retirement often means rethinking ones plans. You need to speak pragmatically too them both. Leaving an inheritance shouldn't be their primary objective. Their welfare should be.

Equity release isn't going to solve the problem longer term. Debt is debt.

MovingForwards

How much is the mortgage payment per month as surely it can't be a large amount if it's £20k outstanding.