Helping a Parent

K

Kitten

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My situtation is this:-
My mum is re-locating from the west to Dublin. Has purchased a house for 510 and expects to get roughly 340 for her own.

There are 4 children. We propose to borrow the difference - 160k which will take in fees, stamp duty etc. in order for mum to be able to do this. This loan will be interest only.

Mum being independant wishes to repay this loan asap and so far the over "60's seniors money" seems like an option. This will enable her to repay roughly 100k of the loan leaving us with much smaller repayments.

Can anyone advise if this is the best way or are there alternatives we have missed?

This is quite imminent so all help would be appreciated. I'm kindof driving this for the family.

Thanks
Kitten
 
hi Kitten,
we are in much a similar situation. and i have been running through the possibilities, we are considering the same as you above but also thinking of buying the house between the 3 of us and renting it back to my parents.they then have a few quid for renovation or changing what they want.the cash from the sale of their own would last approx 15 years with interest added .the difference between the new and old is approx 140k and we are considering borrowing this from the credit union as well.this would mean repaying at a higher rate of interest but at least we could make overpayments and not have to pay out on life insurance to the bank.. maybe this could be an option for you and your's.. 40k each over 10 years..then it would be up to each individual to pay off their own loan and if somebody defaulted then your mum wouldn't loose out on her home.. if all goes ok for us we would then more than likely put all of our names on the deeds and this would help when the parents pass away in sorting out theri estate plus we would all gain an asset.i hope this helps
 
Thanks therave, We have considered this option too but mum really hates the fact that she has to involve us at all and pride wouldn't leave her happy "renting" from us so to speak, so she really wants to repay as much as she can once the house is secured. She is on her own as my dad died 14 years ago so I can understand her independance. Also, whilst I love my siblings dearly when it comes to money I think you have to be so cautious - already my older brother has casually mentioned that he 'doesn't need to be involved in the actual getting of the loan, he'll just kick in with the repayments" which is a non runner. I've already discussed drawing up a contract for the 4 of us regarding any loan whether shortterm or otherwise. Thats why I think an independant co such as seniors money could be the best way.........
 
Have you considered each sibling buying a portion of the new property comensurate with their contribution to it, each can then decide how much they want to contribute. Each would then raise the money themselves, whichever way they want, savings, additional finance on their own home. Then the siblings financial dealings are independant and no one need know the others incomes life insurance situation etc. An agreement would be drawn up between all persons having a stake in the property regulating the arrangement. Each sibling is making an investment which can be recouped when your mother no longer needs the property.

If you get a mortgage on the property you mother is considering purchasing then everyones financial information has to go on the form and your mother has to go on the mortgage, you all go on the deeds. Everyone will be jointly and severaly liable for the whole amount of the mortgage, could you cope with repayments if all of your siblings stopped paying, would you want to?

I think you are suggesting that after you buy the house that your mother goes for equity release, these schemes are a very bad idea and quickly erode the value of the property. There was a set of personal experiences in last saturdays guardian newspaper if you can get a hold of it. Consider your options very carefully and get some very thorough legal advice.
 
kitten, i totally agree with you with ref to the money side of things,people have the best will in the world but when money comes into it then things can get messy..i also think the idea of the seniors cash could be good but the only winners in these transactions are the companies who provide the finance..maybe if you had your mum's solicitor have a chat with her on her own then she could be presuaded to go with your plan... we are currently at the bidding stage on 2 houses and once the folks make a decision we will look at the finance then..but i have been doing the background work without saying anything...as a matter of interest.. have a seniors company already said that they willgo with the plan ? (just in case your mother is disappointed later )
 
Thanks for all the advice. We have decided to stick with an interest only loan without any payback from mum thus avoiding any risk to the equity in the property. Now I'm just dealing with selling the "family home" - it's breaking my heart.
 
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