Interesting situation -
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Anyone in a similar situation at the moment? I know it is quite commonplace to provide deposits - for property but business ventures? Older folk are getting hit at left right and centre it's a warning to ensure your structures are tight and you have sound advisors that can offer a barrier between you and everyone who wants your money.
Cheers,
Donna
Parents put home on market as help rebounds
When Mr and Mrs P's son needed funds to open a bar in Auckland, the retired couple lent him $60,000, secured against their home.
They had a $65,000 mortgage already but as their home's value was $675,000, the combined borrowings amounted to only 18 per cent of the property's worth.
Their son promised to pay the interest on the $60,000 advance, but the business foundered and the loan fell into arrears of $7000. His parents, whose only income is from a pension and superannuation, tried to negotiate lower repayments with their bank, but it threatened a mortgagee sale.
Mr and Mrs P were forced to re-finance more expensively with a second-tier lender. Their son went to Australia and he is not making regular repayments.
Meanwhile, his parents have to forgo having holidays or a dinner out as they cut their expenses to meet their higher mortgage payments.
They plan to sell their home and downsize to a smaller house. "We wanted him to make something of himself without the problems either of us had coming up through hard times," says Mr P. "We see it as a responsibility to make sure he doesn't have to live like we did in our early years."
When Mr and Mrs P's son needed funds to open a bar in Auckland, the retired couple lent him $60,000, secured against their home.
They had a $65,000 mortgage already but as their home's value was $675,000, the combined borrowings amounted to only 18 per cent of the property's worth.
Their son promised to pay the interest on the $60,000 advance, but the business foundered and the loan fell into arrears of $7000. His parents, whose only income is from a pension and superannuation, tried to negotiate lower repayments with their bank, but it threatened a mortgagee sale.
Mr and Mrs P were forced to re-finance more expensively with a second-tier lender. Their son went to Australia and he is not making regular repayments.
Meanwhile, his parents have to forgo having holidays or a dinner out as they cut their expenses to meet their higher mortgage payments.
They plan to sell their home and downsize to a smaller house. "We wanted him to make something of himself without the problems either of us had coming up through hard times," says Mr P. "We see it as a responsibility to make sure he doesn't have to live like we did in our early years."
Anyone in a similar situation at the moment? I know it is quite commonplace to provide deposits - for property but business ventures? Older folk are getting hit at left right and centre it's a warning to ensure your structures are tight and you have sound advisors that can offer a barrier between you and everyone who wants your money.
Cheers,
Donna
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