investing in parents house

bigthings1112

Hello

I have a bit of an obscure one.

Last year I decided to sell my home, I'd been divorced for a while and just wanted rid of the house and the connection to my ex husband. 

So in October I sold it and had a pot of money. I live now in my parents three bed end of terrace with my three children 18/14/10.

I am the primary and as far as I'm concerned the only parent.  So to cut a long story short I was going to invest in my parents house to renovate it enough to fit us all. 

However I have found out that my parents have a life time mortgage, which make this even more difficult. which from the conversations I've had with them that it sits at around 80K.

I cannot afford my own mortgage for the size of house I need in the area I'm in (the children are settled in school and cannot move them)

Also the house needs a lot of work - new boiler - windows - doors - kitchen bathrooms - Everything, plus the extra work to make it suitable for 6 people.

All the quotes have come to a lot higher than my budget.

So now I don't know what to do.

there is an 80k outstanding mortgage that keeps going up and cannot be paid off like a normal mortgage- it has to be in its entirety. (but the interest can be paid of each year)

My dad is saying to get a large loan rather than use my money, I cannot and do not want to do this as I would rather not have extra out goings (the kids cost a lot).

I cannot find anyone who can advise me of my options solicitors etc - I would also like to make sure what I invest in this house would be secure but the only person who can put me on the deeds is my father, and I'm getting push back from him saying he doesn't see why I need to do that or if he can even do that. I'm sure this is just because he doest have a clue. 

Any help or even if you know who would be the best people to speak to regarding any help would be majorly appreciated. I want to make sure my finances and my future (and my children's) are secure.

Brie

I would have thought there was a way to pay off what your parent's owe.  And doing so acquire a portion of their property.  From that point you would have the freedom (if not the cash) to do what you want with their property.  The company holding the mortgage should be able to tell him (& therefore you) how this works.

But if dad doesn't want you on the deeds then could you loan him the money to do some of the reno?  Surely a solicitor could write up something to say that he owes you £X which is being used to put in the new boiler etc and that there is no interest to pay and the loan isn't repayable until he dies.  

bigthings1112

Brie said:

I would have thought there was a way to pay off what your parent's owe.  And doing so acquire a portion of their property.  From that point you would have the freedom (if not the cash) to do what you want with their property.  The company holding the mortgage should be able to tell him (& therefore you) how this works.

But if dad doesn't want you on the deeds then could you loan him the money to do some of the reno?  Surely a solicitor could write up something to say that he owes you £X which is being used to put in the new boiler etc and that there is no interest to pay and the loan isn't repayable until he dies.  

Thank you, I'm not so sure he doesn't want me on the deeds they intend to leave the property to me anyway, I'm an only child.

I think he's just a bit out of his depth. I am wondering if the best option is to just pay the left over mortgage off. But that leaves very little to do the work we need to do. 


But your advice has been helpful thank you. 

Brie

OK so there may be a bit of an emotional thing going on here.  He's your dad and male and I assume you are female (due to an ex husband, but I may be wrong).  In any case he's "supposed" to know more about life and finance than you and likely simply doesn't want to admit he might know less and have to bow to your superior knowledge.  

So maybe gentle suggests - ask him to contact the mortgage/equity release people and ask for a settlement figure - in a "just so you know and can plan" kinda way.  Let him know that you are concerned for your security and that of your children.  If (big if) he and mom needed to go into care the house would need to be sold to pay for it and you and the darling grandkids would be homeless (tugging heartstrings) but with your name on the deeds this wouldn't happen.

Mention the possibility of them growing old in their home with family around them to support them, but to make this possible things need to be done sensibly.

Not that I'm manipulative or anything......

silvercar

You need to something for your own security. Leave it too long and the 80k will grow and you won't be able to afford to take on the debt and pay for all the things that need doing. Absolute worst case is your parents passing away and the house needing to be sold to clear the debt. Another issue would be if one of your parents passed away and the other needed care, the state may demand you sell up to release the equity to pay for the care.

bigthings1112

Brie said:

OK so there may be a bit of an emotional thing going on here.  He's your dad and male and I assume you are female (due to an ex husband, but I may be wrong).  In any case he's "supposed" to know more about life and finance than you and likely simply doesn't want to admit he might know less and have to bow to your superior knowledge.  

So maybe gentle suggests - ask him to contact the mortgage/equity release people and ask for a settlement figure - in a "just so you know and can plan" kinda way.  Let him know that you are concerned for your security and that of your children.  If (big if) he and mom needed to go into care the house would need to be sold to pay for it and you and the darling grandkids would be homeless (tugging heartstrings) but with your name on the deeds this wouldn't happen.

Mention the possibility of them growing old in their home with family around them to support them, but to make this possible things need to be done sensibly.

Not that I'm manipulative or anything......

I love this, you hit the nail on the head.

Yes I'm female. 

I would love to take care of them when they're old, I doubt id get my dad to ever leave, it would be kicking and screaming.

I currently work full time and earn a decent amount. I am considering that the mortgage could be paid off and I would be in a better position to get a mortgage/ loan for the work to be done. I so unsure if this would be the right thing to do though. sadly I wasn't raised with money savvy parents, but have taught myself a lot since my divorce. I think sometimes this irritates him. 

FlorayG

bigthings1112 said:

Brie said:

OK so there may be a bit of an emotional thing going on here.  He's your dad and male and I assume you are female (due to an ex husband, but I may be wrong).  In any case he's "supposed" to know more about life and finance than you and likely simply doesn't want to admit he might know less and have to bow to your superior knowledge.  

So maybe gentle suggests - ask him to contact the mortgage/equity release people and ask for a settlement figure - in a "just so you know and can plan" kinda way.  Let him know that you are concerned for your security and that of your children.  If (big if) he and mom needed to go into care the house would need to be sold to pay for it and you and the darling grandkids would be homeless (tugging heartstrings) but with your name on the deeds this wouldn't happen.

Mention the possibility of them growing old in their home with family around them to support them, but to make this possible things need to be done sensibly.

Not that I'm manipulative or anything......

I love this, you hit the nail on the head.

Yes I'm female. 

I would love to take care of them when they're old, I doubt id get my dad to ever leave, it would be kicking and screaming.

I currently work full time and earn a decent amount. I am considering that the mortgage could be paid off and I would be in a better position to get a mortgage/ loan for the work to be done. I so unsure if this would be the right thing to do though. sadly I wasn't raised with money savvy parents, but have taught myself a lot since my divorce. I think sometimes this irritates him. 

Find yourself a really good, independant and male mortgage broker.
Explain the situation to him and what you think your options are 
Then get HIM to make an appointment with your dad and explain things
Some men just can never convince themselves that their daughters really know about financial things
This is an easy way out for you, you just need to swallow your pride - and, in the end, it will be you making the deal

bigthings1112

silvercar said:

You need to something for your own security. Leave it too long and the 80k will grow and you won't be able to afford to take on the debt and pay for all the things that need doing. Absolute worst case is your parents passing away and the house needing to be sold to clear the debt. Another issue would be if one of your parents passed away and the other needed care, the state may demand you sell up to release the equity to pay for the care.

I agree I'm certainly feeling that I need to pay that money off and start a fresh. thank you for your help on this. It really helping make some important decisions.

bigthings1112

FlorayG said:

bigthings1112 said:

Brie said:

OK so there may be a bit of an emotional thing going on here.  He's your dad and male and I assume you are female (due to an ex husband, but I may be wrong).  In any case he's "supposed" to know more about life and finance than you and likely simply doesn't want to admit he might know less and have to bow to your superior knowledge.  

So maybe gentle suggests - ask him to contact the mortgage/equity release people and ask for a settlement figure - in a "just so you know and can plan" kinda way.  Let him know that you are concerned for your security and that of your children.  If (big if) he and mom needed to go into care the house would need to be sold to pay for it and you and the darling grandkids would be homeless (tugging heartstrings) but with your name on the deeds this wouldn't happen.

Mention the possibility of them growing old in their home with family around them to support them, but to make this possible things need to be done sensibly.

Not that I'm manipulative or anything......

I love this, you hit the nail on the head.

Yes I'm female. 

I would love to take care of them when they're old, I doubt id get my dad to ever leave, it would be kicking and screaming.

I currently work full time and earn a decent amount. I am considering that the mortgage could be paid off and I would be in a better position to get a mortgage/ loan for the work to be done. I so unsure if this would be the right thing to do though. sadly I wasn't raised with money savvy parents, but have taught myself a lot since my divorce. I think sometimes this irritates him. 

Find yourself a really good, independant and male mortgage broker.
Explain the situation to him and what you think your options are 
Then get HIM to make an appointment with your dad and explain things
Some men just can never convince themselves that their daughters really know about financial things
This is an easy way out for you, you just need to swallow your pride - and, in the end, it will be you making the deal

This is great advice thank you so much, I feel you read my situation perfectly. Im on it. 

gwynlas

Perhaps your parents would have liked to have been consulted about your plans before rather than after  moving yourself and three children in with them.

Your father might have thought it was a temporary arrangement and that they would get their home back and enjoy theit quiet lifestyle instead of which they are having to live in a 3 generation household in their retirement

MWT

Just one additional thing, hopefully not an issue, but with a Lifetime Mortgage it is very normal to have a condition that the lender must grant permission to have any new people resident in the property and that permission is usually subject to getting a residency waiver signed by anyone over 18, did that happen?

... if considering repaying the mortgage in full then do check for any 'early redemption' penalty.