Taking over parents mortgage need advice

pdevo

My father recently took ill and may no longer be able to meet the mortgage repayments of over €1,200 per month. Initially my brother offered to take over the repayments for the last 3.5 years of the term to pay off the mortgage and also pay them €25,000. This would amount to roughly €80,000 which is a little less than market value of this house at the moment. my brother is now no longer in a position to do this so myself and my wife are offering to do the same. my parents will own the house until they pass away and it will then become ours. Just to note i am 1 of 6 children none of my other 5 siblings are in a position to do this. They are all married with children and none are living in the home house. I am interested to know has anyone else here done this or know someone who has done this, what should we be mindful of? We will be going to go through a solicitor but just need things to be aware of before we commit to this.

GerardKeating

pdevo wrote: »

My father recently took ill and may no longer ........ We will be going to go through a solicitor but just need things to be aware of before we commit to this.

Either I am misunderstanding your maths, or the house is in massive negative equity. Your brother paid almost the entire market value of the house in the past 3/4 years. When did the mortgage start and how much is outstanding?

Is it worth the money to "save" the house, for the same outlay, you might get him more suitable accomidation.

Gael23

GerardKeating wrote: »

Either I am misunderstanding your maths, or the house is in massive negative equity. Your brother paid almost the entire market value of the house in the past 3/4 years. When did the mortgage start and how much is outstanding?

Is it worth the money to "save" the house, for the same outlay, you might get him more suitable accomidation.

You will need to make a will and put in clause in the event you die before your parents thry have a life interest on it.
For their sake can they move to a smaller property and pay off the debt?

GerardKeating

Gael23 wrote: »

You will need to make a will and put in clause in the event you die before your parents thry have a life interest on it.
For their sake can they move to a smaller property and pay off the debt?

I don't. but the OP might need to.

coylemj

Gael23 wrote: »

You will need to make a will and put in clause in the event you die before your parents thry have a life interest on it.

Just because the OP takes over the mortgage payments, it doesn't make him the owner of the house. If he makes a will, he has no business including a clause about the house as it's still owned by the parents.

Making payments for a loan which is in somebody else's name carries the risk that if they die in the morning, all of the equity stays in their estate and you may see no return for your money. I know this is a family issue and the OP is doing this for the parent's benefit but I'd be looking to get the agreement of the rest of the family that the parents would make wills leaving a significant % of the house (if not all of it) to the OP.

drunkmonkey

Could you just buy it off them, rent it to the council and get them to put your parents in it and the council pay you rent.

jimmycrackcorm

drunkmonkey wrote:

Could you just buy it off them, rent it to the council and get them to put your parents in it and the council pay you rent.

Why not just ask the council to pay the mortgage?

Johnboy1951

pdevo wrote: »

My father recently took ill and may no longer be able to meet the mortgage repayments of over €1,200 per month. Initially my brother offered to take over the repayments for the last 3.5 years of the term to pay off the mortgage and also pay them €25,000. This would amount to roughly €80,000 which is a little less than market value of this house at the moment. my brother is now no longer in a position to do this so myself and my wife are offering to do the same. my parents will own the house until they pass away and it will then become ours. Just to note i am 1 of 6 children none of my other 5 siblings are in a position to do this. They are all married with children and none are living in the home house. I am interested to know has anyone else here done this or know someone who has done this, what should we be mindful of? We will be going to go through a solicitor but just need things to be aware of before we commit to this.

So the deal would be, you pay 3.5 years of mortgage left to run, and additionally pay your father the sum of 25k ...... for which you get ownership of the house once the mortgage is paid.
I believe some arrangement will have to be made with the mortgage company so they are aware of the situation .... but I might be mistaken, so that is one of the things you need to clarify with your solicitor.

There is also the matter of valuation, and possible tax implications around an increase in property value, which you should ensure will not adversely affect you.

The solicitor should be able to draft a fairly simple and straightforward agreement for you once you are clear of other concerns.

antoinolachtnai

It is great that you are helping out your family. That is very good.

However be sure to understand the financial implications of what you are doing. In particular, I would be very careful of paying over the €25,000 unless you are absolutely certain you can afford it, and that it is what you want to do.

Hopefully your father will have a long and happy life. If that is so, it may be decades before you get the benefit of the money you are investing now. Your father will have gotten a great deal, but having this burden may make it difficult for you yourself to secure financing of your own for a home or do some other project that you would like to do.

Bear in mind that a house needs maintenance. You need to consider who will provide this. It will be a lot to expect you and your wife to pay to repair a house which you own but can't live in and don't get rent from. If your father doesn't maintain it for whatever reason, you will really need to step in and maintain it.

That is the 'happy' situation where your father lives until a ripe old age. Also, look at the less optimistic situation. If your father needs to go into a nursing home, who will fund the costs? What will happen to the house?

It is important to think out the possibilities as best you can, the good ones and the bad ones, then go to the best solicitor you can find, and get advice.

Your father will also need legal advice. This advice really needs to be separate from the advice you are getting yourself.