Great. We'll just tell the OP what he wants to hear and the whole world will be a better place, right ? This is an internet site, we can't give context to what is said or how it's said. Stay safe.
Parents Need Help with Mortgage
- Thread starter Ambivert
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No coldness intended at all. The parents have a huge asset many multiplies of their debt. One has to be practical here, children cannot afford to bail them out so downsizing is the answer.
It's not they going to be out on their ear or have no option but apply for HAP or go into a crabby room in a government supported b&b.
dereko1969
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I don't see coldness, I think people are, quite rightly, advising the OP to get much more information. The fact that the parents aren't giving more information has been rightly queried by LondonIrish who has gone through exactly the same thing where there were many more debts than originally acknowledged.
You're basically telling the OP to gift money, to "protect" a potential future asset that will (it seems) be shared amongst a number of siblings and potentially wreck their own opportunity of getting a mortgage in the mid-term, that's not good advice in my view (based on the information we currently have).
Also, they don't "need" to stay in their home, they want to, not the same thing at all.
Brendan Burgess
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OP
Your parents need to talk to a financial advisor with whom they will discuss everything.
Trading down is not really an option. Rent a room would be much better.
If they engage with Pepper and pay them €500 a month, they can probably live in it forever.
You presumably are paying them at least that in rent?
Then in time, one of the siblings can remortgage their own home or they can avail of one of the Life Loan schemes.
Brendan
Your parents need to talk to a financial advisor with whom they will discuss everything.
Trading down is not really an option. Rent a room would be much better.
If they engage with Pepper and pay them €500 a month, they can probably live in it forever.
You presumably are paying them at least that in rent?
Then in time, one of the siblings can remortgage their own home or they can avail of one of the Life Loan schemes.
Brendan
I'd be embarrassed asking for financial help if I had half a million to my name.
There are options. The OPs father clearly hasn't considered them. It's up to the OP to manage the sensitivities, the internet can't do that for them.
dereko1969
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Why do you think trading down isn't an option?
NoRegretsCoyote
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This is very odd advice. I don't know many couples in their late 60s who would be happy sharing a bathroom and kitchen with a lodger indefinitely.
Trading down is perfectly feasible from (say) €650k to €550k. Unless they are living in prime Dublin it will get them a home commensurate to their needs in same neighbourhood.
Thank you for your response. I wholeheartedly agree and I regret starting this thread after seeing those responses.
I could not have asked for better parents growing up. It is really hurtful to me as well seeing people on here being so judgmental of two people I love dearly. They were not physically looking for money off us either, but our ability to borrow a loan that would be put towards a portion of the debt amount that is owed.
Gordon Gekko
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Are any of the siblings wealthy or “set-up” in terms of their own home etc?
What if you all purchased the property from your parents for €100k?
i.e. the €600k becomes a gift but it’s below the collective Group A thresholds.
And no CGT for your parents as it was the Principal Private Residence.
Your parents could then pay you guys “rent” just to cover the ongoing cost of the mortgage (which would be tiny as it would be €100k spread over 25-30 years).
There shouldn’t be any tax leakage as the rent and the interest should be offsetable.
A bank would give you a loan if you’re taking ownership. And the repayments on €100k over 25-30 years would be pretty small so I can’t see it massively impacting on people’s ability to borrow for their own purposes. What might it be, €400 a month maybe?
What if you all purchased the property from your parents for €100k?
i.e. the €600k becomes a gift but it’s below the collective Group A thresholds.
And no CGT for your parents as it was the Principal Private Residence.
Your parents could then pay you guys “rent” just to cover the ongoing cost of the mortgage (which would be tiny as it would be €100k spread over 25-30 years).
There shouldn’t be any tax leakage as the rent and the interest should be offsetable.
A bank would give you a loan if you’re taking ownership. And the repayments on €100k over 25-30 years would be pretty small so I can’t see it massively impacting on people’s ability to borrow for their own purposes. What might it be, €400 a month maybe?
LondonIrish
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I apologise if I came accross to strong. In my situation, I was hit with a financial request when I wanted to move into a family home. Moreover, my property at the time was jointly owned with my wife who paid half of the mortgage. So I was asking her to take on more debt on a property that was not suitable for us (two kids under 5) whilst my own parents ran up debts that they were unwilling to face up to. I appreciate that your own situation is very different and I jumped in with limited information.
I guess if people here were to give better advice they would need to be better informed about the entire situation. Does you father expect to continue to work? Do your parents have a pension? What happens if one sibling suddenly needs cash, can they sell their part of the mortgage to another sibling? Sharing a debt between a family like this can store up problems for the future unless one of you can carry this burden on your own?
I suspect that your old man has been stressed about this for years and it has taken him a long time to approach you. I am sure that he would prefer to do anything else save ask you. You mention that he is looking for help with part of his debt so he will still own money after this? If you do take on the debt it would be helpful for posters here to understand what the medium term plans are. Does he intend to retire or does he need to contine to work given that he will still owe cash. If you take on some of his debt now are you just providing a breathing space before he might need help again.
Neither of my siblings have property. They are both older and do not take money as seriously as I do.
I appreciate that. Thank you.
My parents financial situation is something that has been at the back of my mind for a number of years now. I have never really discussed it with anybody outside and it has been a difficult thing for me to do. I am hoping soon there may be some light at the end of the tunnel.
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dereko1969
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We can only go on the information you provided. You stated yourself that your parents were evasive when asked about the scale of the financial issues they're facing. You stated yourself that downsizing seems the best solution but when we state it it is suddenly "cold". I'm sure your parents are great but they are looking for a solution that isn't feasible - the rest of you getting a mortgage on a property you don't own - so alternatives were suggested on here, most of which were aimed at protecting your interests as you're the one posting here.
NoRegretsCoyote
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No one is judging your parents.
They are judging a set of facts and circumstances that you decided to share. It's a pseudonymous forum and any post could be fact or complete fiction, or a bit of both.
There's a lot is useful signal and not much noise on this thread.
You'd get more useful ideas if you engaged on substance.
I did say that downsizing is a logical solution. They do have an emotional attachment to their family home though and 500-600k does not buy much near to where they are living.
Despite what you say, a bit of sensitivity never goes amiss. Some of the responses here were leveling criticism at my parents and questioning their moral qualities. If any of those people met my parents in person I bet they would feel bad about being so judgmental about them on a forum. Life is not always so black and white and my parents were hard working people who never milked it during the Celtic Tiger. They were simply unfortunate in falling victim to unscrupulous business people when the crash happened.
You must look up the definition of judgmental then.
(The rest of your post is just a load of high and mighty bumpf that I cannot understand.)
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Ambivert. No one is judging your parents. As NoregretsCoyote posted it's an anonymous forum on money matters, it's not a forum for agony aunts. I have no doubt your parents are wonderful kind human beings. They have only being living in the area 25 years. Lots of older people downsize for practical reasons as well as financial reasons. If there are no properties locally, try the next neighbourhood, a nice two or three bedroomed house should suit their requirements at this time of life.
It's tough what happened to your dad during the last recession, it really was an awful time for many hundreds of thousands of people. However, this current pandemic has seen many many more thousands of people thrown on the scrap heap with jobs gone, mortgage breaks coming to an end and no hope in sight, it really is a horrendous situation for them. Your parents have options, having no money or no.job or no hope does not give people options.
It's tough what happened to your dad during the last recession, it really was an awful time for many hundreds of thousands of people. However, this current pandemic has seen many many more thousands of people thrown on the scrap heap with jobs gone, mortgage breaks coming to an end and no hope in sight, it really is a horrendous situation for them. Your parents have options, having no money or no.job or no hope does not give people options.
LondonIrish
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Perhaps we should return to the issue at hand.
If selling is not an option then you'll need to borrow the money. Since you cannot get a mortgage on a property you don't own then I guess you'll need to take out a personal loan unless you already have a property you can borrow against? Or can you go guarantor on your parent's mortgage? I suspect that arrangements like that are not an option nowadays. You might want to find out if the money owed is secured against anything (such as the house).
So find how much your folks need (you may need to do a bit of probing) and then see what your siblings have to say. My experience was that the more siblings are involved the more complicated things become because everyone's financial situation is unique; if at all possible one person takes on the debt and the others agree to split the estate after the loan (plus interest) as been repaid. That's where a solicitor comes in (as recommended above).
I know you want to do what is best for your folks but everyone needs to be honest with one another and it seems to me that you are a bit in the dark yourself. Can you take your old man out for a pint and have him run through everything? He has probably had creditors on his back for a decade and just wants this to go away but you don't want to take a loan out yourself if it only serves as a temporary sticking plaster. I hope it works out for you all.
If selling is not an option then you'll need to borrow the money. Since you cannot get a mortgage on a property you don't own then I guess you'll need to take out a personal loan unless you already have a property you can borrow against? Or can you go guarantor on your parent's mortgage? I suspect that arrangements like that are not an option nowadays. You might want to find out if the money owed is secured against anything (such as the house).
So find how much your folks need (you may need to do a bit of probing) and then see what your siblings have to say. My experience was that the more siblings are involved the more complicated things become because everyone's financial situation is unique; if at all possible one person takes on the debt and the others agree to split the estate after the loan (plus interest) as been repaid. That's where a solicitor comes in (as recommended above).
I know you want to do what is best for your folks but everyone needs to be honest with one another and it seems to me that you are a bit in the dark yourself. Can you take your old man out for a pint and have him run through everything? He has probably had creditors on his back for a decade and just wants this to go away but you don't want to take a loan out yourself if it only serves as a temporary sticking plaster. I hope it works out for you all.
OP: I genuinely feel for your situation but I would encourage you to not take the comments too personally. It is easy for posters to be blunt when they have no emotional attachment to the situation but they are genuinely offering financial solutions to your situation. I don't think any of them are judging you or your parents in what is a difficult situation. Your parents evasiveness is most likely their way of trying not to over burden you with what they see as their problem.
What you need to know (as a family):
What you need to know (as a family):
- Exact outstanding balance and term of mortgage and the interest rate
- Fathers current income and how long he can (or is able) to continue working
- What pension arrangements do they have: is there a lump sum coming when your father retires? Or will they just be relying on state pension
- Do they have any other savings that have been 'ring-fenced' for something else...this should be used for the mortgage
- What would their situation look like if you were not living with them and paying rent
- Impact to you and siblings: If you take on a mortgage on your parents property, you could each potentially lose access to the 'help to buy' scheme which is significant to your chances of buying a home
dereko1969
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I think OKGO's point about what would happen to the OP's parents if the OP decided to move out to either rent or buy another place is really important. Is there the possibility that the OP might feel obliged to stay in the family home longer than they would like to help keep the parents in their home?