What about setting up your own private reverse mortgage, with the help of a solicitor? i.e. Draw up an agreement where you agree to buy their house from them, $200 a week at a time - or whatever $ amount they need "extra" to get by - with some mechanism determining how much equity you have at some future point (i.e. when they've both passed away).
Advice on a family matter please!
- Thread starter Mitch1
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Yes, I got accused of being materialistic and all sorts of other things, oh well.Maybe you should contact a bank now and see if you would get development finance for you your retirement project with no income coming in for the rental property if you purchased the in-laws house.
The bank didn't want to know about the NZ blocks so it has never been taken into consideration on an asset basis. We did the transfer and bought the blocks before we bought the block in oz that we are currently doing and have always just thought of the NZ block as a small back up...TBH we mostly just forget about it, a local farmer keeps the grass cut for a few bottles of whiskey a year
I am having fleeting thoughts of putting the blocks in their name
Purchase plus costs etc would probably negate the C.G. To some extent and look into legal ways in which the finance in their house could be left to us ... (Guardianship/appointor or something) so that we can manage the affairs if equity needs to be released for nursing homes/ health care etc but house effectively remains in their name... And if it doesn't all get used for that we may get something back, but they are looked after.... Hhhmmm
So they borrowed 270k from you and did pay back. They didn't cheat you or anything. Now you guess they won't pay rent. How much they want you to pay for the house? At market value or the money they spent?
Instead of asking here, why don't you ask your hubby to talk to them explaining your situation as well and find a conpromise? Of course, they may not understand. But you can give a try.
Instead of asking here, why don't you ask your hubby to talk to them explaining your situation as well and find a conpromise? Of course, they may not understand. But you can give a try.
I understand where you are coming from but if they want to sell us the house for the equity, leaving an inheritance is not in their minds as they then have nothing to leave, it would be ours at its current value. They can only borrow 25% at a higher variable from my quick look online and it isn't an expensive house???at most, 300k. As another post mentioned, probably only worth doing with 1m and over properties.
Singo, they want market value. My hubby lives in another country and doesn't consider long term issues and thinks I am materialistic if I bring up the difficulties or costs of helping family out. I am asking here because it is a property advice forum, it is a difficult situation and it is about property and I am trying to look at options I can give him without causing a family feud or worse still, issues in my relationship.
I have NEVER said they are out to cheat us, yes they paid back, they are honest and Christian people but do not have any idea of what is involved in what they are asking. I have a little more knowledge but not much. It probably took a lot for them to even ask him so I want to help them in the best way possible for all of us.
They really aren't, they are good people and just worrying about their future, both in their 70's. Them paying rent would not be an option to be honest!
That is for you to consider. If you borrow to buy another income producing property you could have 2 or 3 assets growing in value. If they pay rent you would be able to claim negative gearing etc too. If they don't want to pay rent you could assist them so they could afford it.
House is then in your name, they die and it remains yours. If you sell and help them with a cash gift that is up to them to leave to whoever. If you loan to them that would be repayable upon their death.
Sounds like they don't really need help/
They need help in halting their continued willingness to help others to their own detriment. (As a parent I can see why they do it though) They sold a beautiful home in Auckland to move to the cold sth island and be closer to their grandchildren, be of assistance to the family instead of flying up and down when she had cancer as well as freeing up cash. In helping out, they chewed through the equity released. The house they bought became too hard for them to manage when various health matters/his own cancer etc happened so they built, if they released equity at that point, it must be running low again.
I am beginning to think the pattern is firmly entrenched here and they will be unable to withhold this helping business, it annoys hubby no end and is none of our business, or at least wasn't. I am thinking perps 'private mortgage' set up is looking like the most viable option. This way controlled sums are handed over and the mortgage is over their own home, and we hold the mortgage.
Sounds like you are financing your sister in law rather than helping your inlaws out.
If its financial assistance they require why don't you suggest they sell the house on the open market and they find a suitable home to rent. You can then pay their rent. It won't affect your serviceability, you can turn a blind eye to how they spend the proceeds of the house sale as you are not involved and they know they always can afford a place to live even if the sale proceeds dwindle away. Your husband with then have comfort he is looking after them financially.
If its financial assistance they require why don't you suggest they sell the house on the open market and they find a suitable home to rent. You can then pay their rent. It won't affect your serviceability, you can turn a blind eye to how they spend the proceeds of the house sale as you are not involved and they know they always can afford a place to live even if the sale proceeds dwindle away. Your husband with then have comfort he is looking after them financially.
I still think they should use up all there own sources of funds first.
Maybe it is either the reverse mortgage or sell and rent.
Spending other people's money should really be a last resort - and while they still have the equity they still have other options.
I agree. It sound like they 'want' money rather than 'need' it.
It could get further complicated if at some stage the sister in law and family moved in rent free also to care for the parents at a later stage!
They want to release equity without moving house yet again. They are in their 70's so I can understand that. They did have a comfortable life but that has dwindled considerably and the comforts of holidays, non necessity purchases and even private healthcare are gone.
I am not sure they realised how much all of this helping out would eat into their nest egg, they can't have been blind to it and I do not understand why they let it go so far, I guess too soft hearted and no parent wants to see a child struggle if they can help it.
They are not destitute by any means but they have spent their entire life saving for a reasonable life style but are getting by.
Committing to paying their rent until they no longer need it is not something I would want to sign up for, what happens if we can no longer do that, hubby works contract to contract and I do not have an income.
Not sure I could turn a blind eye to them chewing through it at a fast pace wether it is to 'help' the S.i.L. Or blow it on luxuries if we are the ones who again have to come to the rescue, and I can only bite my tongue for so long if that happened
I agree, but won't have much 'say' in it, my own folks would approach it that way if it ever happened.
They won't see it as spending others money, in their eyes we are getting a house for that money, they just get to keep on living in it!
Really gonna have to tread gently on this with hubby next time he is home and get to the bottom of all of these different approaches and what works best to suit all of us!
They want to release equity without moving house yet again. They are in their 70's so I can understand that. They did have a comfortable life but that has dwindled considerably and the comforts of holidays, non necessity purchases and even private healthcare are gone.
I am not sure they realised how much all of this helping out would eat into their nest egg, they can't have been blind to it and I do not understand why they let it go so far, I guess too soft hearted and no parent wants to see a child struggle if they can help it.
They are not destitute by any means but they have spent their entire life saving for a reasonable life style but are getting by.
Committing to paying their rent until they no longer need it is not something I would want to sign up for, what happens if we can no longer do that, hubby works contract to contract and I do not have an income.
Not sure I could turn a blind eye to them chewing through it at a fast pace wether it is to 'help' the S.i.L. Or blow it on luxuries if we are the ones who again have to come to the rescue, and I can only bite my tongue for so long if that happened
This is such a tricky situation - particularly because it's your DH's family
How much money do they think they can raise this way?
I would think and discuss a few things
1. Contact all of your DH's siblings and talk about everyone buying a share of the parents house. Then when they die they get their share/inheritance. This is the best way to get a certain sister to back off from money
2. Consider how the parents will afford to get into a nursing home if they don't have any assets. From talks with my parents, they have told me they need $300k to get into one and most people sell their house to raise that money to move in. If they don't have a house to sell then how will they raise that money.
The bond you may get asked to pay to enter a nursing home is in 2 forms, either:
- an upfront loan of say $300k (with some annual redemption of the loan which maxes out at around $20k after 5 years) or;
- the equivalent interest on the $300k amount at a rate of around 8% (govt varies this figure)
So, you don't actually have to sell the home, although you will have to pay more per month (interest amount) if you don't deposit the lump sum.
I've lived through similar stuff to this, one sibling sucking the lifeblood (financially and emotionally) out of my late parents when they were alive, and sucking $1M out of us now they are gone. There is no relationship with this brother, and we put up with him only for the sake of our mother. The cost to us of $1M is worth it to never have to see him again .
I'd try to avoid possibly years of paying out at your own cost for your hubby's parents when the money you pay them if you buy their house is likely to go to his sister. But I also understand your need to protect your marriage and this becomes tricky.
If his parents are in their 70s now, is it possible that they sell their house on the open market but move into a retirement village with a nursing facility attached. They may be too young for a nursing home, but I have a very dear friend who was like a grandmother to my children (lived next door) who passed away yesterday who moved about seven years ago into a nursing home but on the grounds were little units that she really wanted, but she left it too late, and by the time she decided to give up her own home, she was too high care for those little villas and went into the nursing home itself.
Another friend's parents have just moved into a villa attached to a nursing home but they also should have done that a few years ago when they were better able to cope. It has been a real struggle but better to be able to move together than wait for one to pass away and then have to quickly find something for the remaining one who cannot cope without their partner.
I would have done anything for my parents, and for my mother-in-law, but buying a house and being able to meet mortgage payments without any rent coming in would not be possible.
Perp's idea sounds ideal. You have control over their asset whilst drip feeding them enough to live on without giving them enough that they can pass it on to their daughter. Sad though her story is, it will end up that you would be funding your hubby's parents and his sister, whilst possibly not ending up with anything.
.I'd try to avoid possibly years of paying out at your own cost for your hubby's parents when the money you pay them if you buy their house is likely to go to his sister. But I also understand your need to protect your marriage and this becomes tricky.
If his parents are in their 70s now, is it possible that they sell their house on the open market but move into a retirement village with a nursing facility attached. They may be too young for a nursing home, but I have a very dear friend who was like a grandmother to my children (lived next door) who passed away yesterday who moved about seven years ago into a nursing home but on the grounds were little units that she really wanted, but she left it too late, and by the time she decided to give up her own home, she was too high care for those little villas and went into the nursing home itself.
Another friend's parents have just moved into a villa attached to a nursing home but they also should have done that a few years ago when they were better able to cope. It has been a real struggle but better to be able to move together than wait for one to pass away and then have to quickly find something for the remaining one who cannot cope without their partner.
I would have done anything for my parents, and for my mother-in-law, but buying a house and being able to meet mortgage payments without any rent coming in would not be possible.
Perp's idea sounds ideal. You have control over their asset whilst drip feeding them enough to live on without giving them enough that they can pass it on to their daughter. Sad though her story is, it will end up that you would be funding your hubby's parents and his sister, whilst possibly not ending up with anything.
Wow Wylie, 1m to get your brother out of your life...he must have been some brother
but you go to sleep at night knowing you did everything you could in honour of your mother, so worth the peace it brings no doubt.Perps idea is a fantastic one and a sage approach. I spoke to hubby briefly on this last night when he called as I am not sure how quickly they want to move on this. Thankfully, it isn't an immediate action so we have some time to organise our own stuff. Setting up a trust etc. I do not want to rush that bit right now as we are waiting on DA lodgement and what not so getting that sorted and moving on with the pre preparation for request for information is going on at the mo and taking a lot of time.
We are flying his folks over to 'look after the dog' while we are in Europe in a few weeks. It is family code for you have our house in nice sunny climate all to yourselves. It gives them a break and allows us to do something for them so everyone 'saves face' they love it, the dog loves them so much and our house is occupied. There are a few days where they will be with us and hopefully hubby will bring it up while I am around so I can get a clearer picture but I suspect they won't as it would be a pride thing to involve me in an open forum. They are private people and I respect that.
Hubby's take on it is that they are now living pretty much solely on the pension. They are both very active and involved in the community and going into any sort of resi care (asset assessed I found out yesterday) would be abhorrent to them. I reckon they have many years of being able to go on as they are quite well now that the worst of the health issues are over. He also reckons they are now finally over helping the sister (only sibling)
Their house is worth approx 300k and was purchased in their family trust. Our land is worth pretty much the same. His take on it is too trade one for the other and give them the peace of mind they are looking for. If we do the private mortgage we are controlling their finances which he is not keen to do. He is leaning towards purchasing the house to avoid that. We do not rely or need the blocks for security for finance so it could be just 'written off' for peace of mind. If it all goes the way he envisions then we have a house at the end of it. If not then we have the house to cover additional costs further down the track.
I suspect we will do what you have done for the comfort of knowing we did what we could, when we could. Hopefully good intentions don't come back to bite us!
I have been in this relationship for 20yrs and we are still going strong which I am grateful for
we take turns to back off when it matters and this is very likely going to be one of those times. My compromise (perps!) would make them 'beholden' to us, I can see why he would rather push it under the mat so it is not something that needs to be addressed on an ongoing basis. We can all pretend it never happened 
