70 year old parents with remortgage

LegacyUser

I have made a discovery recently that really worries me,

I have discovered my parents have a large re-mortgage. I suspect this was taken out a couple of years ago to help my sisters get on the property ladder, both work in finance and are very manipulative. I never asked for assistance and done everything myself (educate and pay rent/save for mortgage) they are younger than me, but had houses before I did. This is not the issue though before someone starts saying im jealous, im proud that I never have burdened anyone.

My parents have very little in terms of money, my Dad drives an early 90's car, cant afford to change it and my mum still works a lot of hours for someone her age. I recently discovered that my sisters were both putting on the poor mouth again, trying to get new cars. They are being totally selfish and inconsiderate as my parents should be living it up now.

My mum in particular is up to her eyes in debt and is very depressed over it, she has had a particularly hard year but the two sisters are still looking for more and more hand outs, financal assistance and favours etc.

I just want to scream at them, but I know that my parents will take their side no matter what. Will I say it to my parents as this seems to be a very well kept secret that I've suspected for a long time, (as they dont earn enough to qualify for a car loan, nevermind a mortgage) and stumbled on recently.

Victor

Its possible that your parents have availed of an "equity release"-type loan that doesn't need to be repaid until they die or sell the property.

It might be time to have that chat about nursing homes, wills, etc.

Gone Drinking

Tell your sisters about your parents financial problems..

JuliusCaesar

TigerStyle wrote: »

I have made a discovery recently that really worries me, .....

I just want to scream at them, but I know that my parents will take their side no matter what. Will I say it to my parents as this seems to be a very well kept secret that I've suspected for a long time, (as they dont earn enough to qualify for a car loan, nevermind a mortgage) and stumbled on recently.

This is going to sound very harsh, but your parents are adults and are responsible for what they do, and how they do it. (unless they are cognitively impaired). Do not interfere as it is liable to give rise to a lot of ill-feeling.

However as Victor said, the nursing home chat may be useful to both your parents and yourself.

humanji

I'd have a chat with your sisters, if I were you. Don't be aggressive, just let them know your fears and ask them if they contribute anything to your parents to help alleviate their depots. Try and remind them (but try not to guilt trip them) that they are their parents and the least they could do is make their later years enjoyable and relaxed. Find out if your sisters are trying to get more money from them, and if they say yes, tell them about your parents debts and how they can't afford to be paying for every extravagance that your sisters want.

is_that_so

JuliusCaesar wrote: »

This is going to sound very harsh, but your parents are adults and are responsible for what they do, and how they do it. (unless they are cognitively impaired). Do not interfere as it is liable to give rise to a lot of ill-feeling.

However as Victor said, the nursing home chat may be useful to both your parents and yourself.

While I agree with you that they are adults their age can make them susceptible to manipulation by their family as recent surveys have shown. I think ill-feeling amongst siblings overrides responsibility towards one's parents.

bangersandmash

JuliusCaesar wrote: »

This is going to sound very harsh, but your parents are adults and are responsible for what they do, and how they do it. (unless they are cognitively impaired). Do not interfere as it is liable to give rise to a lot of ill-feeling.

There are two issues here.

The first most important issue is that the OP is concerned that his/her parents will spend their retirement in financial hardship. The OP's sisters either have no qualms about this or (more likely) are unaware of the financial problems that their parents face. This is not at all uncommon for children who have grown up during the boom. The nonsensical obsession with "getting on the ladder" will have unforeseen consequences for many people.

The second issue here is that this debt will have to be repaid some day. If the OP's parents have used an equity release, then this is likely to affect any inheritance that the OP will receive. I'm not trying to sound callous, but this debt is something that will likely affect the OP at some stage in his/her life. There's no point in pretending that it isn't a problem.

OP although your sisters work in finance, it sounds like they are oblivious to your parents' situation. Unfortunately at some stage the issue of nursing homes will have to be discussed. Perhaps you need to calmly discuss this with your sisters sooner rather than later. Are they aware that the cost of private care in Ireland can be up to €1300 per week ? Do they have any contingency plans, given that your parents helped them out when they were "in need"?

It's a matter of priorities - hopefully they'll see that the happiness, health and well-being of your parents is far more important than extravagances such as new cars. Unfortunately it sounds like they may need a "perspective shift" before they accept the reality of the situation, and that may take some time. Best of luck.

LegacyUser

Hi, Thanks for the replies.

Its a mortgage, they are now paying over 1k a month back.

Its very serious I think they are suffering in silence and are afraid to tell me about it.

They have nothing for themselves. My Dad worked a hard 40 years to get to where he is and I just can't believe it. I'm not worried about my inheritance, of course its important but now and in real terms, I would rather their life expectancy was increased. There is nothing I can do about the debt at this stage, but I need to have an approach and get them to stop leaning on them for support.

The nursing home is a good angle to take.

LegacyUser

I would approach your sisters with concerns about your parent's financial well being, but not in an accussatory way at all (ie basically pretend you have no idea how/why your parents got themselves into this hole). Ie they are old, shouldn't have to keep working hard, etc.

The key is to make them feel guilty but not put them on the defensive.

I'd also note that I knew a family in a sort of similar situation, though there was only one daughter who got most of the attention. After the father passed away, the mother went to live the daughter for years, so that ended being a decent investment on her part. Perhaps in a nursing home discussion, you could feel out if they were thinking the same.

anthony4335

I agree with the rest , talk to your sisters about the troubles as they may be blissfully unaware of any problems. As you said your parents did not tell you, they may not have told them either. As with most people, if you have relied on your parents for a helping hand when needed you will always go looking for it. If it turns out that they do not care or want to own up to the situtation you can deal with that then, untill then give you sisters the benifit of the doubt.

miss no stars

I don't mean to sound morbid but... if your parents die suddenly and are in negative equity then you may end up footing the bill. if this loan was taken out to help your sisters (find out about this and more about the amount, especially as so many people are in negative equity - thank you economic slow down) you might want to see your solicitor about making sure you don't have to foot the bill and only they would. that behaviour from your sisters isn't on at all. What age are they, by the way?

Victor

If a person dies, their debts die with them (the bills still need to be paid).

this situation won't put the OP into debt, but it could use up her potential inheritence.

bangersandmash

Victor wrote: »

If a person dies, their debts die with them (the bills still need to be paid).

It's not that simple when it comes to a mortgage, which is the case with the OP's parents. Assuming that they have mortgage protection cover, that policy can be used to clear the outstanding loan. But if a person doesn't have cover, then unfortunately the bank could potentially require that the family home (or any other assets) are sold off to cover the outstanding debt.

Thoie

bangersandmash wrote: »

It's not that simple when it comes to a mortgage, which is the case with the OP's parents. Assuming that they have mortgage protection cover, that policy can be used to clear the outstanding loan. But if a person doesn't have cover, then unfortunately the bank could potentially require that the family home (or any other assets) are sold off to cover the outstanding debt.

Is it even possible to take out a mortgage without mortgage protection cover? I know I tried to get away without it by telling the bank that if I die they can have my place, no quibbles, but they insisted on mortgage protection anyway.

bangersandmash

Thoie wrote: »

Is it even possible to take out a mortgage without mortgage protection cover? I know I tried to get away without it by telling the bank that if I die they can have my place, no quibbles, but they insisted on mortgage protection anyway.

I've never come across it, but apparently it's not required in certain circumstances (see here)

You do not have to take out this insurance if you are over 50 or if your mortgage is on an investment property, but it can be an advantage and some lenders may insist on it as a condition of getting the mortgage.

OP I would suggest that you subtely find out whether your parents have joint mortgage protection for this mortgage that they're paying for your sisters' benefit. It's important to know these things.

crosstownk

Thoie wrote: »

Is it even possible to take out a mortgage without mortgage protection cover?

I don't think it's possible nowadays. Every mortgage and top-up I've taken has this as mandatory.

So I'd say Victor is right.

Victor wrote:

If a person dies, their debts die with them

sam34

yeah but the op wont have to pay up out of his/her own pocket /assets to cover the debts, which was what someone earlier appeared to be suggesting. it could affect the op's inheritance but thats as far as it would go.


op- try talking to the sisters. as someone said, they may assume your folks have plenty cash, your parents may not have been up front with them. i know that i have no idea how much money my parents have saved- it could be anything from 10k to 250 k, or even more, i genuinely dont know. maybe your sisters didnt realise theyd be remortgaging to give them money, might have thought they had savings to use

miss no stars

still doesn't excuse the adult sisters thinking that their parents' savings are there for buying houses and cars for their grown children.

sam34

miss no stars wrote: »

still doesn't excuse the adult sisters thinking that their parents' savings are there for buying houses and cars for their grown children.

couldnt agree more, i think thats despicable. however, lets give these sisters the (very small) benefit of the doubt.

kaiser sauze

Victor wrote: »

If a person dies, their debts die with them (the bills still need to be paid).

this situation won't put the OP into debt, but it could use up her potential inheritence.

OP, this advice is absolutely untrue.

Gary ITR

afaik the next of kin can be asked to repay the debt. But this is highly unlikely and would only happen if there was no payment protection in place, which is tha last few years most banks have been insisting on. So I would say in this case that Victor is right.

What selfish sisters though, I wouldn't put pressure on my parents to help me buy a car/house etc and my parents both have good jobs and are only late forties

kaiser sauze

Onkle wrote: »

afaik the next of kin can be asked to repay the debt. But this is highly unlikely and would only happen if there was no payment protection in place, which is tha last few years most banks have been insisting on. So I would say in this case that Victor is right.

You could be right, however, you are speculating.

Debts become part of your estate upon death, they are still due. Victor's statement that debts die with you is incorrect.

Gary ITR

kaiser sauze wrote: »

You could be right, however, you are speculating.

Debts become part of your estate upon death, they are still due. Victor's statement that debts die with you is incorrect.

I am specu;ating... but there is a very slim chance that i am wrong and this is not the concern of the op so we better do back on topic

milod

OP, if you want to help your parent, the best way would be to arrange for them to see an independent financial adviser.

There are a few options including debt restructuring (they probably won't get a longer payment term due to their age though). The mortgage could also be switched to an equity release type loan that is only paid on their death.

After you have helped your parents you might begin to tackle you sisters, for example suggest that your parents make a will that includes the portion of the estate that they have already received (the equity release would be paid from their portions of the inheritance).

You could also make your sisters fully aware of your parent's income and outgoings and suggest that they all sit down together to see who has the most disposable income and re-apportion it accordingly to help pay off the mortgage.

Really it just sounds as if your sister's selfishness needs to be exposed and they need to be guilted into making things right. Finally you may want to recruit support among your Aunts, Uncles etc who may also be aware of the issue but are remaining silent...

Morgans

I'm quite surprised at the attitude of most posters to the sisters. They shouldnt be guilted into doing anything. They should be told the situation, as they should have been done years ago before the ramifications of getting a leg up on the property ladder without being able to afford a house were obvious.

Parents were foolish enough not to recognise the ramifications either, and need to get financial advise on how to best resolve their situation. From my view of things, their love is being abused by spoiled children, who seem to be unaware of how the world runs.

But as long as the OP sisters dont have to worry about living in a house they cant afford, or driving cars they cant afford, sure no one loses. :rolleyes:

Pigletlover

Firstly, if a person dies, their debt does not die with them (although this is the case with most credit unions). Re the life assurance, Under the Consumer Credit Act 1995, an applicant can sign a mortgage protection waiver if:

- The residence is not their private dwelling house

- They have been declined life cover, or their premium has been loaded

- They are over the age of 50

The OPs parents may or may not have life cover in place, that isn't really relevant.

Someone said that the parents were foolish to remortgage their house in the first place. They may have done so a few years ago when interest rates were less than half of what they are now, and when they felt they were able to manage the repayments. Because of their age the term of their mortgage would be much shorter than the average mortgage, any increase in interest rates would result in much higher monthly increases which may be why they find themselves in the position they are now in.

OP you need to make your sisters aware of your parents financial situation. I'd second the advice made by cafecolour, where you talk to them about it, but don't accuse them of anything. Maybe if they realise how much trouble your parents are in they will a) stop being so selfish and b) may even try to help your parents out of the situation they got them into.