Tak­ing over par­ents’ mort­gage is risky propo­si­tion

The Star Democrat - - COMICS - HELAINE OLEN To ask Helaine a ques­tion, email her at askhe­laine@gmail.com.

Dear Helaine: My hus­band’s par­ents re­cently asked my hus­band if he and I would be able to take over their mort­gage pay­ments when my mother-in-law re­tires in just over a year. My fa­ther-in-law no longer works due to a dis­abil­ity.

The mort­gage has 20 years re­main­ing on it. While we could cover the monthly mort­gage pay­ments to­day, we are con­cerned that any num­ber of is­sues could arise over the course of 20 years that would in­ter­fere with our abil­ity to con­tinue pay­ments.

My hus­band and I are both ap­proach­ing 40 with no debt, but our sav­ings are not much more than emer­gency funds. I only re­cently paid off my stu­dent loans, and we are now plan­ning to spend the next few years sav­ing for a down pay­ment for our first house. We live in a very ex­pen­sive re­gion, which is the place where we can most read­ily find work; my in-laws’ home is in another re­gion of the countr y en­tirely. We also plan to start build­ing re­tire­ment sav­ings.

My hus­band’s par­ents have of­fered to leave the house to us in­stead of his two sib­lings, but it seems un­cer­tain what kind of value we will ul­ti­mately re­al­ize from this out­lay of cash, aside from the value of keep­ing my hus­band’s par­ents in the house, which we’d both like to have hap­pen, if pos­si­ble. Is it un­wise of us to be tak­ing over the pay­ments? Are there al­ter­na­tive op­tions? — Un­sure

Dear Un­sure: No, no, no. Do not do this.

I un­der­stand your in-laws’ de­sire to re­main in their home, but if they can’t af­ford the pay­ments, they should put it on the mar­ket and use the pro­ceeds to re­lo­cate to a res­i­dence that’s in their bud­get.

The num­ber of things that could go wrong if you and your spouse take on the mort­gage is stu­pen­dous. How would you guar­an­tee they would leave the home to your hus­band? Would they make him a joint ten­ant with right of sur­vivor­ship, or are you just re­ly­ing on them to keep their word about the ul­ti­mate fate of the house?

Can your in-laws af­ford the up­keep, or will that ul­ti­mately fall to you as well? What hap­pens to your in-laws if you or your spouse lose a job and you sud­denly can’t af­ford their mort­gage? They will likely need to sell and sell fast. That won’t be a good out­come, ei­ther, es­pe­cially the older they get.

In ad­di­tion, I don’t think you and your hus­band can af­ford to take this on. You’ve all but said you have — at best — limited funds set aside for re­tire­ment.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.