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

Yeah I know she has done things that aren’t right like turning a gift into a loan and buying a property in my name but at the end of the day the money was earned by my dad not me so I do want to give back whatever I can.

It seems like remortgaging isn’t really advisable. I don’t know if monthly repayments will stop her from having a go at me. I guess I can only try and see how that goes.

I’m really really surprised that an accountant doesn’t have a private pension.

Instead of giving her reassurance very time you speak, can you not be firm with her and say
"Mum, we've spoken about this. I'm putting away savings every month to ensure the £xx loan is available to you whenever you need it. The only other way to resolve this is for me to remortgage and take on more debt so that I can repay you in a lump sum. Would you like me to do that? Either way, you must stop with the money anxiety. Dad says there's no reason to fret, but the more you keep bringing it up, the more the whole family is worrying about money. Now, the next time you bring the subject up, I'm going to tell you I don't want to talk about it any more. Ok? "

Sounds to me like your mum likes to keep you dependent on her....and uses that as the perfect excuse to 'control' and get emotional supply from you.

Just tell her that it was a gift so you won't be paying her back.
She can turn her 'worrying' somewhere else.

My fear is that she'll come to rely on the monthly payment, and so the guilt and complaints about it stopping once the debt is paid will start. How will she cope when shes no longer getting that help? Etc.

Perhaps a sit down with your dad alone, tell him it's making you not want to see your parents anymore as mum always makes you feel in her debt about the money but then he says it was a gift, do they want the money back or not? If they do, you'll remortgage, release the money, give it as a lump sum and then want to not hear another word about it. If they dont, then he needs to speak to your mum about shutting up about it, or you'll leave as soon as she mentions it/hang up the phone.

Your mums fears around money are translating into hateful behaviour towards her dc.

She wants you to remember you owe her, so that you can be her plan B if something happens to her money, but by banging on about it, shes making you resent her, rather than feel dutiful, which is what she wants.

Disgruntled - excellent post. OP, I cannot believe you have put up with this for so long, unbelievable behaviour by your mum.

I have never heard of this before.

I hadn’t either, but quite a few posters on the thread I referred to said they had been involved in a transaction of this sort. I haven’t myself, but the last time I bought a house we had to say where we had got the money.

Something to do with money laundering regulations, I guess. And if part of your answer is “gift from parents”, then the lender wants to know that it truly is a gift and not a loan. Because they have assessed the mortgage affordability taking into account any other borrowings you may have, and the sums would be different if you owe your parents 50K, say.
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I agree that this is nothing to do with the money and everything to do with family dynamics. Every time you spend hours talking about this, you are feeding the anxiety rather than reducing it.

You need a broken record response. "Mum we've spoken about this. Do you want us to save a lump sum or give you instalments? Cup of tea?" And you can end the conversation or even the visit if you need to.

OP according to your sums, £600 per month over 10 years equates to over £70000.

Unless you have acquired a huge amount of equity or you both have INCREDIBLE salaries, remortgaging is a very silly idea. You would be risking your own HOME if sometime in the future you are unable to keep up the repayments - are children on the horizon? Would you be prepared to cut your maternity leave short? Or have to juggle childcare in order to keep paying the bills? Would yoube prepared to have to compromise every future financial decision because you are repaying this so-called debt?

I echo pp suggestions to open up a limited access account and transfer £600 per month whilst you can. Show your mum the balance when she asks, tell her that after years of being told it was a very generous gift (although your updates suggest slightly dodgy intentions from the start, fraud, BTL income etc), you simply cannot afford to pay her a lump sum. Especially as she won't even commit to an amount you apparently owe her.

Seriously, if your parents are rattling around in a £500k house and you and your sibling have promised them you'll help them out, I'd sit it out. Make a plan to build up a lump sum but do not remortgage your home and jeopardise your own financial future.

Trying to throw money at her will not fix this.

Why are you so afraid to be assertive? You're coming across like an absolute doormat. I can't believe you'd rather screw yourself over financially just to avoid learning to be assertive.

She’s been super anxious about money her whole life, even in good times.

So why on earth do you think throwing money at her will change one single thing? It won't, and then you'll be back asking how to deal with her because nothing has changed except your financial circumstances.

You need to learn how to stand up for yourself and not to engage with the demands for reassurance. You don't have to spend hours reassuring irrational worries. Just say "we've discussed this, let's not keep going over it" until she stops.

Yes, it will be uncomfortable at first, because you're not used to asserting yourself and she is used to walking all over you, but if you keep doing what you've always done nothing will change in this dynamic.

I havent read all the thread. If you give them such a large amount back, with all the assets they have, yours will simply increase the inheritance tax and when its left to you 40% will be taken off it. Its madness for that reason alone

If she's worrying about inheritance tax she clearly has plenty of money and assets ! I's just give her a couple of hundred pounds a month for as long as it takes.

So she says they can’t downsize because they lose money in tax. She also can’t live in a flat so it would need to be a bungalow which costs almost as much as their current house so it’s pointless moving. All her friends whose kids have left haven’t downsized for that reason. It doesn’t make financial sense.

I do feel bad because it’s a large sum of money that would have probably been very useful in their retirement and the state pension is pretty crap. I really want to repay but do it in a way that doesn’t financially screw us all over in terms of interest payments, credit rating, inheritance tax etc

Like heck she is entitled to any of your equity.

If you want to repay the original loan, I would just start putting the money into savings. We had something somewhat similar with the ILs. They suggested regular payments . I declined because they wouldn’t agree on what the total should be. (I promise there was a good reason for the floating total, they weren’t being difficult and were doing is a huge favor). I didn’t want to start giving them money without a firm payoff plan. So we put the cash into savings and then once we had about the right amount, went to them to determine the final figure and wrote them a check.