Parents Need Help with Mortgage

A

Ambivert

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To make the introduction short, my father is a man in his late 60's who has been self employed for the majority of his career. The last recession was not kind to him and as a result he is still working and has a mortgage of I believe 100k against the family home. The house has a valuation of maybe six or seven times that figure. My parents are wanting to stay in their current house they have been in for over 25 years. They have therefore asked myself and my siblings if they can borrow a mortgage in our names to pay off the one that is due.

I want to help them, but feel this will jeopardize me if I want to go for a mortgage to purchase my own home in future. Am I right to have these concerns?
 
Yes. You will not be able to get a mortgage on a house not owned by you.

Which lender is your parents' mortgage with?

Is it in arrears? What is the history of the mortgage?

Are they under pressure to redeem it?

Does any of your siblings have a house with a mortgage that they could remortgage and borrow the additional €100k

Brendan
 
Brendan Burgess said:
Which lender is your parents' mortgage with?
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It was sold off to Pepper Mortgages, who are not a vulture fund.

Is it in arrears? What is the history of the mortgage?

Are they under pressure to redeem it?
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It is not in arrears. It is due to be repaid and they have been given a timeline to get it in order.

The mortgage was originally with Permanent TSB.

Does any of your siblings have a house with a mortgage that they could remortgage and borrow the additional €100k
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Unfortunately not.
 
Ptsb sold only non performing loans to Pepper.

Was it a split mortgage? Is this the warehouse which is due?

When is it due to be repaid?

How long have they given you?

In general, it is better to provide all the information in one post so that you can get some comprehensive ideas.

Brendan
 
Depending on the number of siblings, how about getting term loans and giving the money to your parents? You will have to tell the bank you want it for a car loan or something. It will also impact on your ability to get a mortgage during that period but at least you will have it paid off within 5 years.

As Brendan said, you won't get a mortgage on a property you don't own and it has other ramifications such as losing the 10% deposit for first time buyers.

This is a classic case where a reverse mortgage would be the solution for his parents but these products were driven out of Ireland with the snakes as it interfered with the "children's" inheritance but never considered the years of misery their parents had with no money but a valuable, useless asset.


Steven
www.bluewaterfp.ie
 
Brendan Burgess said:
Ptsb sold only non performing loans to Pepper.

Was it a split mortgage? Is this the warehouse which is due?

When is it due to be repaid?

How long have they given you?

In general, it is better to provide all the information in one post so that you can get some comprehensive ideas.

Brendan
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I am not sure of the full details. I have found it a rather difficult subject to broach with my parents as they are evasive at times and I have been trying to be sympathetic towards what is a sensitive discussion for them. I get the feeling that they are not realising the seriousness of the situation and are reluctant to make the life changing decision of selling their house which they have built a life around in the local community. They said they took an extra loan out during the Celtic Tiger and then when the crash came used it to get them through tough times. My father had a major client who stuck him for a major sum in 2009 and he has been banking on a court case since then.
 
SBarrett said:
Depending on the number of siblings, how about getting term loans and giving the money to your parents? You will have to tell the bank you want it for a car loan or something. It will also impact on your ability to get a mortgage during that period but at least you will have it paid off within 5 years.

As Brendan said, you won't get a mortgage on a property you don't own and it has other ramifications such as losing the 10% deposit for first time buyers.
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I really would prefer not to put myself on the wrong financial footing for the future. I am late 20's myself and have worked hard to build a nest egg these past couple of years. I am living in the family home, saving and handing up money presently. I would be sad to see it happen, but I have suggested to my parents to sell the house and purchase one of lesser value and I will find shared accommodation elsewhere. It is the only logical solution to the problem I can see.
 
Ambivert said:
It is the only logical solution to the problem I can see.
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If it was available, why would selling a share in their house not be a logical solution ?

You and your parents would continue to live in the house, it would only be sold when your parents both pass away.
 
Why sell anything. You have a house that is being lived in by PPR for years. Tell the bank/debtor to put a charge on the house if they want for the 100k. No judge will rule they will have to sell.
 
Hi Ambi

You should get your parents to contact John Lowe.

They would be more open to talk to a third party than discuss it with their children.

If the house is worth €600k, Sixty Plus Finance will buy say, 40% of it for €100k. They will get their payoff when the house is finally sold when they move into a nursing home or die.

but your parents pay nothing in the meantime.

It would be a long and arduous process for Pepper to get an order for possession against your parents, but it will be a stressful process for them and if they can resolve it, they should do so.

Brendan
 
Ambivert said:
I am not sure of the full details. I have found it a rather difficult subject to broach with my parents as they are evasive at times and I have been trying to be sympathetic towards what is a sensitive discussion for them.
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If they can't even tell you their financial situation it's absurd to be asking you or siblings for a loan.

They have equity enough for a fine house for retirement. Let them figure it out themselves.
 
Ambivert said:
I am not sure of the full details. I have found it a rather difficult subject to broach with my parents as they are evasive at times and I have been trying to be sympathetic towards what is a sensitive discussion for them.
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You can't ask for help on one hand and be evasive about the details on the other. What is the payment pm? Can you club together with them (pension) and siblings? No loans, no dealing with banks etc. Just pay it off over the remaining term. A tricky situation for your folks no doubt.
 
Itchy said:
You can't ask for help on one hand and be evasive about the details on the other.
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That was my initial reaction, but, on reflection, it seems that he just does not know.

Or he may want to not put up such details as will identify his parents.

Brendan
 
Ambivert said:
I am not sure of the full details. I have found it a rather difficult subject to broach with my parents as they are evasive at times and I have been trying to be sympathetic towards what is a sensitive discussion for them. I get the feeling that they are not realising the seriousness of the situation and are reluctant to make the life changing decision of selling their house which they have built a life around in the local community. They said they took an extra loan out during the Celtic Tiger and then when the crash came used it to get them through tough times. My father had a major client who stuck him for a major sum in 2009 and he has been banking on a court case since then.
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I had a similar situation with my own parents. Your parents evasiveness is a concerning, it might simply be because they feel embarassed about asking or it might be because there are more debts that they are not admitting to which was the situation we encountered.

The solution for our family was for one sibling to buy my parent's property at a discount whilst they retained living rights to it (I cannot remember the correct legal term). Essentially, my sibling will take ownership when my parents pass on. We briefly examined the possibility of all siblings taking a joint mortgage but that was too complicated and would, we believed at the time, create problems in the future and we did not want this issue to cause a rift between us. The sibling in question had enough cash to do this at the time.

That said, the whole process was quite frught and stressful. My parents just asked for cash out of the blue and like yours would not countenance the sale of their home. When we got to the bottom of their finances we discovered quite a few more issues. The upshot was that they had to sell their property because they had no other choice but they got to continue living in it.

I appreciate that you are in an awkward situation (not of your own making) but you cannot be expected to take on debt to help them if you do not know the full extent of their financial situation. I suggest that you sit down with them and go through everything. They also need to understand that any debt you and your siblings take on has consequences for your own finances (they get to keep their family home but you might not be able to afford one if you take on their debt). Ultimately, it is a little unfair of them to look for financial help whilst taking their largest asset out of discussions. They are your parents and I am sure they made financial sacrifices for you and your father seems like he has tried his best to honour his debts but the sale of the home would be tax free, clear their debts and end the stress. It seems like the obvious answer to me.
 
Im surprised at the level of coldness in some of the replies.

Whats in it for you..etc. tell em to sell up.. the cheek of em putting this pressure on you..

The parent is almost 70, worked hard, provided for you all, got done over like a lot of folk, and as above said, probably quite embarrassed to find themselves in this situation at this stage of their lives, have always been looked up to by their kids and now, to be reluctantly asking for help. Flippen ek, how cold of a society have we become.

Their €600k asset will be your asset in due time. This should be about you all as a Family, and not how it will impact you as a Twenty-something or other.

Yes, you need a professional to mediate, and it will be money well spent, but they need to stay put in their home. Back them up without the feelings of, what about me.
 
Well said LS400, it must be very embarrassing to ask for financial help from your children, if you can you should try and help them out.
Get professional advise & get them to make a will.
 
I appreciate that everyone's situation is different but in my case my parents were not being honest about their finances and the poster who began this thread did say that his parents did not seem to realise the seriousness of their situation.

My first instince was to help my parents but the more I found out about their money problems the more I realised that they needed a lot more cash than they were admitting to. If I had been a lone child I would have had to remortgage my appt where I lived with my wife and two children whilst my parents got to live in a much larger property - it took some time for my parents to understand what they were asking of us.

When it comes to money and family you need to be as objective as possible. The parents have a large, valuable asset. They could sell it, trade down and hopefully stay in the same area and this might solve all their problems without recourse to more debt.

The impact on your own finances should not be underestimated. If you have to postpone buying a family home or some similarly important event in your life because you have had to take on debt to help out a family member then the borrower should be taking this into consideration too.

I would suggest you sit down and go through you parent's finances to help all of you understand what choices are available to you. If they sold up could they afford to retire? Do they have pensions or any other sources of income?
 
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