Helping out Parents in debt

[Witchinawell]

I am hoping for some advice on how I can help my Mum. My Mum had just paid off her home a few years ago and was looking forward to a comfortable retirement. Sadly, a sibling of mine who has since passed had a major accident whilst uninsured abroad and Mum had to remortgage her home to get them the intensive medical care they needed. We (the other siblings) also helped out financially to get them home but Mum took the brunt of the costs with the remortgage. The costs of paying back the mortgage as well as debts she has accrued from overspending since my sibling passed are crippling her financially. If she did not have these payments each month, she would be able to live a comfortable life. In order to wipe her debts, I am considering moving in with my partner, paying him a rent, then selling my home (which I own outright) and purchasing her home from her at market value so that she can pay off her mortgage and debts. She would then pay me a small monthly rent. Another option would be her selling her home and moving into my home and paying me a rent, however my property is much bigger and I know she would prefer to stay in her own home. Has anyone done anything similar with their parents and can advise if this is a good idea or not ?

Yes, I'm afraid I thought 'Well yes of course they are!' when I read that. My mum wouldn't want me doing anything to jeopardise my own financial security and well-being, and I don't think it's the right solution here.

Is there any scope for your mum to downsize to a one-bed flat or something, maybe helped by you and sister to prop up the money she would get from the house sale?

In fact, as you own your house outright could you not have her sell her home, get a mortgage for an amount on yours to get some cash that you can then use along any equity from the house sale and buy somewhere cheaper together (in joint names or whatever needs to be done) for your mum to live in. That way you keep your home and your money is invested so you will eventually get it back.

Do you want your mum living with your permanently? Does she want that? I know neither of us would, so a small flat or something seems like a better idea. How much equity does she have?

I agree with PP that there could be pitfalls so you need legal advice.
You don’t say how old your DM is or what her current health is like; Obviously this makes a difference to how long the arrangement for her house might last. Also, if you sold and paid off her debts, what kind of proportion of the capital from the sale would the debts take? Would you be able to ring fence the remainder to provide a deposit on something if you and DP were to
split?

Can your DM rent out a room in her property, she can earn up to approx 7k per year tax free

Can she sell & downsize, look at properties for over 55s if she is that age

Speak to Stepchange or similar

It would make most sense for her to move to yours. If you then decide to move in with partner at any stage, she can pay costs of your property but will have no mortgage to pay. If things don't work out with partner, you still have your house to return to. But I guess it also depends on whether you feel you could happily live with your mother.

No that's silly. You and your partner may split up, it's possible. Would you live with your mum? What if she met someone and moved him in. It's not going to end well. Keep your lovely place. The sibling who recieved the loan for medical care, could she take put a loan to help mum? Could she take in lodgers/downsize to a flat?

Can’t she downsize or sell the house and rent?

I would suggest she speaks to Citizens Advice or another of the free debt advice charities first.

We bought DH’s mother a house to live in to help her after her divorce. It has ruined our relationship. We are in a much more precarious financial position and we have tied up all of our finance for life. We’re unlikely to see any of it….it will be an inheritance for our daughter. We’re having to take additional financial measures to ensure our own retirement. Proceed with caution.