Title sums it up, but here's the deets as best I have them…. In-laws are retired 78m, 70f, and are essentially living off of their retirement/pension. Roughly 3k a month as I'm made aware. Mortgage has creeped up as they do, and FIL is behind on HOA by $700. Mortgage is currently 2k, 5th year home of ownership, roughly (as I'm not privy to info) $700/month in cc payments, plus an added 2k in dental debt (Dentist had the FIL taken out a line of credit for dental work IDK!). No other income. My wife and I (one unit) as well as my BIL contribute $750 monthly ($375 each unit).
In-laws expenses monthly:
Mortgage+HOA (debt) 2.7k
Food: SNAP benefits
Dental care debt: 2k (unsure of monthly payment schedule ATM.
Car payment: $275
Monthly CC payments: $700
Total CC debt: $10k
FIL credit score 700iirc
My wife and I are both. Working 2 jobs each, salaried + contract work and are pinching pennies at this point. Can't offer more financial help and we're worried they're well over they're heads at this point. FIL wants to take out a HELOC and he's impressionable as he receives many "loan offers" as of late. We're not sure what we can possibly do…and we're trying to read cautiously as my BIL is a lien holder on the mortgage, but he refuses to contribute more bc his financial situation has changed unfortunately.
We do NOT live with them. Currently residing in NY while they own in FL. We have 2 kids (one in daycare) hence the financial strain on our end.
TLDR; In-laws struggling with payments. We are too strapped to support further. They are contemplating a HELOC or other measures to pay off debt, but I think that will spiral… What do?
In-laws over their heads re:mortgage… How can we help?
byu/Affectionate-List947 inpersonalfinance
Posted by Affectionate-List947
18 Comments
Review their escrow account. That’s why the mortgage is creeping up. Shop around for new home insurance if that’s what’s jumped.
You can also see if the city/county/state the home is in offers property tax breaks for the elderly.
They are spending over 2/3rds their salary on that mortgage. Typical wisdom is a mortgage should be no more than 1/3rd salary. They need to sell the place
The truth? If they haven’t figured it out at this point, they’re never going to. Stop hindering your financial security and future ability to retire for their bad decisions.
Sell the house. Hopefully there’s enough proceeds to payoff debt. Find a small one bedroom apartment to rent for as cheap as possible. Get all expenses under $3k/mo.
How much equity do they have? If it’s at all possible, they need to sell their place and buy something they can pay cash for.
You cannot control their financial decisions. All you can do is be clear what you can and can’t offer.
I do want to verify: you do not live with them, right?
Other than you getting a bigger place and them moving in with you. They are above their heads. Their is nothing you can do. They need to change where they live. hey have SNAP benefits, Food Bank maybe. Cut back to one old car.
The need to sell the house. They cannot afford it. Can they live with either of you? Their home requires to much outpatient economic support. That will bankrupt you and them. They cannot afford this. They need to severely downsize and unfortunately get jobs.
You need to put that mortgage in forbearance . Most lenders will allow you (typically 6) few months of skipping payments which are then added to the end of the term + interest and fees. Not ideal but gives you a few months reprieve to restructure your debts or pay them off. If they manage those credit cards it will free up some cash in the future months to manage the mortgage payment .
They need to sell and you need to not jeopardize your own stability for their sake. If they’re 70+ and haven’t figured this out there’s nothing you can do to help
What does that mean “mortgage has creeped up, as they do”??
Who buys a house with a mortgage at 73? I bought at 35 and was kind of thinking I was too old.
They need to get out and either buy an old condo for cheap, or rent something a little cheaper.
At that age they shouldn’t have a mortgage. The house they live in should have been paid off over 30 years ago. That house has to go, they’re house broke.
A HELOC is just a loan against the house’s equity, they will have to pay that back no matter what. Maybe they’ll save some money on interest but this won’t affect their overall situation.
Your help is drowning you. This is not your doing. They should rent some of their home out or move to a different market. Just my two cents.
They bought too much house and can’t afford it.
They should sell and rent instead.
You are probably going to have to live with them. Do the math. A heloc is 6-7% if you take it and then do interest only on all the debt how much is left?
Stay out of it! They need to make some hard decisions!
They can’t borrow themselves out of debt.
Have you validated their income is no more than 3k/mo? I am having a hard time with retirees (from NY?) having that depressed an income. Can they put together a total expenses budget? Obviously they’re running tight, but eventually the car payment goes away, and possible COLA adds a bit to income. 10k and $700 isn’t necessarily a good amount to “just sell it,” as 5 years is the rent/buy threshold they’ve passed. If the brother-in-law is a lienholder on the property (assuming from repairs, cosigner?) he would have to be paid how much for sale to actually commence? This isn’t a savvy post, I know. But I gotta be skeptical.
They dug a hole they cannot get out of. They have made every bad financial decision they can make. They seem to still be doing so. Doesn’t sound like they’re losing sleep. Everyone else is. It is very difficult with family more so with parents. You all need to sit down with solid figures and figure a way out of this mess. How can you “retire early”, not max out SS and buy a house you can’t afford? Everyone needs to practice tough love and stop the bleeding. No insult intended but it sounds as though your family is not financially savy enough to figure this out. You need statements of all income and bills. Everything going in and out. Then tough changes need to be made for all involved. Good Luck to you I wish you all the best.
Honestly? Retirement is a number not an age, and even without this house I didn’t think they can afford to be fully retired. Even 20 hours a week of work would make a big difference for them.