increasing mortgage to repay parents

[Jadefeather7]

So when we bought our place my parents kindly helped us out with our deposit so we could get on the property ladder. It was made out to be a gift at the time but has now turned into a loan (which I am fine with as it is their money at the end of the day)

My mother is a serial “worrier” and has been her whole life because she had an insecure childhood. She’s always worried about the family financial situation and had never really spent very much. My dad (who is an accountant by the way) thinks they are fine financially but she disagrees.

In any case we always wanted to try to repay them, and now that we have decent incomes we suggested doing monthly instalments however whenever we mentioned it to her she would say “Not now- I will let you know if/when I need it” I assume she’s also thinking about inheritance tax etc as she’s mentioned before to my brother about wanting to set up trusts etc. DH and I are getting a bit fed up off her constant digs about money whenever we mention going away on a holiday or doing something nice for ourselves. She talks about her fears of being homeless and not being able to eat which is honestly ridiculous as she knows that as long as her kids are around that could never happen. We would rather not eat ourselves than see our mother going hungry. But anyway we want to end these conversations and do a lump sum payment to her so she has peace of mind that the money is in her bank account.

We have good incomes so we can look to increase our mortgage. Have discussed with a bank and pulling out the amount we want to repay would increase our mortgage by £600 which we can afford. Obviously hoping that there aren’t massive changes to interest rates. Is there anything else we should be aware off or think off before we go down this route? I’m a little nervous as I’m still fairly young and not massively financial savvy! Thanks

I also think this worrying gets worse with age. My dad repeats things over and over again. I would never mention to him that my car is due a service for example, because he will ask and ask about it every time he sees me (and sometimes several times a visit) until it is done.

@poowillybumbum Interested to know your reason for saying not to remortgage? Thanks!

I think setting the money aside every month is a good idea actually. It gives you the peace of mind that you can repay her if necessary and if not then you've built up a good savings pot.

@SpringFan My dad can’t do much. We can collectively reassure her after about an hour or so off going over things and then it’s the same again a few weeks later. My dad just says to me” you know what your mother is like- she’s wasted her whole life worrying when there’s nothing to worry about”

Sounds to me like she likes to have a stick with which to beat you. If you can afford it I would increase the mortgage and pay her off.

@Reallybadidea I agree and we have been doing that for six months already but it doesn’t stop her bringing this up every time we see her

She has a 500k house and is whining about being homeless? Could she have the start of dementia? It sounds like very irrational thinking, why don’t they downsize?
If she kept this level of moaning up I’d distance myself.

Why not put your big girl pants on and sit down with your mum. Reiterate that it was originally a gift but that now it is a loan. You're happy to pay her back a bit at a tome, despite your dad who is an accountant stating that it is not needed. You could then explain about extending your mortgage to pay her as constant comments are a bit much. Let's have it out in the open and close that festering wound.

Will the lump sum or monthly instalments help her anxiety? I really don’t know
@Jadefeather7 I think the monthly instalments would be better. Each time she asks you can say more money has gone in. She will almost certainly have a scenario in which the account is lost or emptied of a big lump sum!

I'd do it op. Just pay her. And stop this merry go round.

Don't remortgage in order to give money to a very wealthy person who doesn't need it! Your mum isn't anxious because she doesn't have the money, she's anxious because she's anxious. If she had the money there would be something else for her to worry about and you'd have got yourself into huge amounts of debt (I assume, if it would add £600 a month to your repayments) for no reason.

If you want to make a nice gesture then why not put the £600 a month into a high interest savings account only to be touched if your mum falls into financial difficulty. That way it's earning interest rather than costing you money, and it's there in the very unlikely event that she needs it.

(And echoing what others have said, giving a gift then later announcing it was a loan - after it's too late to return it - is a shitty thing to do to someone (as well as legally unenforceable).)

I wouldn’t remortgage because security of family home is a priority, if there is a market correction soon then you may find yourself in an unfavourable LTV bracket. Also will the 600 extra still be doable if one of you loses your jobs? I’d say better to pay now interest free then if shit hits the fan you can discuss with your parents who - let’s face it - should be okay given they have a rental property and inheritance they can always cash in and use to buy an annuity. My answer might have been slightly different if your dad was worried too, and if it was a loan, but it sounds like your mum has a MH problem not a money one.

Speaking of pensions, if you’ve got plenty of disposable income at the moment now is a good time to think about your retirement plans too!

That said I’m super risk averse - we live in the SE and I refuse to take on a mortgage that isn’t sustainable on one of our incomes - would rather overpay on a small mortgage then use the equity later than borrow more now. I don’t think that’s the norm - our mortgage advisor finds it strange that at age 28 we only utilise half our eligibility!

Don’t do it. Carry on with the payments set aside and show her the amount racking up when she starts at you. Then try to change the conversation if that doesn’t work then retreat! Go home, take a phone call what have you. Repeat ad nauseum.

You could end up doing this, causing yourself unnecessary financial hardship and if she has untreated anxiety she could fixate on something else to upset herself with and possibly you too. The exception is if your parents suddenly really need the money. Which doesn’t seem to be the case.

Sorry, I missed you saying that you already were putting the money aside. In that case I think she is being incredibly unfair.

I have anxiety. It just finds a new outlet.

If you pay her back and then go on a nice holiday will it change or will she just say "oh it's ok for you, we couldn't do something like that we don't have the money"? If so then nothing will stop the ruminating (other than therapy for her which you say she won't entertain) so you'll still be doing the same platitudes that you'll look after her.

I second the idea of sitting them down. Suggest putting money away monthly in an account and offering to show bank statements. She might find that reassuring and then move the conversation on quickly to something else.

Having anxiety and living with someone with anxiety is exhausting.

Whilst paying her the lump sum will be a relief for you it sounds like she is still going to want reassurance that you'll be there for her.

For that reason I would tell her that she needs to stop the constant comments about the money because you have offered to pay her the money back in installments and she has refused so it's not fair to keep bringing up the money. Tell her the comments need to stop or you have to reduce how much time you spend with her.

It sounds like you are all pandering to her anxiety. I bet she can control
the constant need for reassurance with other family and friends.

@badgermushrooms It does seem more sensible to me to give her the £600 a month directly but I just don’t know if it will stop her comments. I wonder if seeing a large sum in her account might be more helpful for her anxiety and just put an end to the issue once and for all. That’s really the only reason to do it. Financially not the best way of doing things I agree

it is her anxiety taliking - its not the money ...
my mum does this as well and also had a shit childhood and also wont have any treatment/discussion aout it as she tried something once years ago and it didnt agree with her......

so as you wont be able to change her and teh the chances are it will get worse as she gets older you need to find a strategy for how you can manage how you feel about it...

We are in a similar situation, though I’m assuming with a smaller amount.

When we bought our house PIL paid off a loan DH had from before we were married which had a few thousand left on it. It was an indefinite loan and MIL said she did want it back but didn’t want us struggling to pay it. We offered to pay a monthly amount which we could easily afford, but she brushed it off, while making it clear she did want it ‘at some point’ .

Instead we took it upon ourselves to open a savings account to put the monthly amount into. Every few months DH sends her a screenshot of the balance. She knows if they are ever struggling we have the money there to pay them back, but she seems satisfied that she isn’t actually taking money from us. Seems a bit silly to me but it makes no difference to us really and keeps her happy.

Would something like that work with your DM? At least that way you’d be earning some interest rather than paying out much more interest on your mortgage. Regular updates on the amount will hopefully keep her anxiety at bay and stop the guilt tripping. If in the future they ever do really need the money you could look at remortgaging then, but at least you’d already have some saved and would be borrowing a smaller amount. If they decide they don’t want it back after all you have a nice lump saved and no unnecessary debt.

This is such a frustrating thread!!

OP, did they sign the legal paperwork to say it was a gift??

Yep, this just sounds like she’s a worrier and will just find something else to worry about if you pay her back in full.

What does your DH think about all this? It must make things difficult between you.. my other half had help from his parents to buy our house, no strings attached. If they then decided they needed it back to the tune of £600 a month (when they don’t really need it) I’d be really annoyed and we’d struggle to find all that extra cash!

@smudgebutt thanks, will look into that. What sort of benefits do you mean?

anything that might be affected by having money in the bank. so access to local authority paying for care home for instance. If the money is in an account with your name on it there's no affect on your ILs total assets. If it's in the MiL/FiL names then it's part of their assets even if it also has your name on it. (MiL & DH have a joint account and therefore half that money is considered to be MiL's and the other half DH no matter the source)

However, when parents (or anyone) give money for a deposit, they have to sign paperwork to say 1) it is a gift, not a loan; 2) they have o financial interest in the property. These are conditions imposed by the mortgage lender.

I have never heard of this before.

@Tippexy I don’t really know what paperwork was drawn up. I was 18 and had taken a year out of my education to work for a year so they managed to buy a property and get a mortgage in my name. They received rental income from that property for about 10 years after which I sold it and used the proceeds to buy my house. To be honest I’m less fussed about the gift turning into a loan. I just want my parents to be happy and for us to all live in peace.

Okay - he bought a property in your name. There was a mortgage and I assume the rent paid this for ten years. When you sold it I assume the outstanding mortgage was paid off and the equity was yours.

What money is your mum claiming now - the deposit they paid when you were 18, or the equity hat was built up?