Quote:
Originally Posted by UFO
Why wouldn't downsizing be a good idea? Your parents are into their 60's, semi retired, and from the sounds of it still trying to find ways to pay off their mortgage. I'm going to guess that without your's and your sister's contributions, and the basement rental, they would not be able to make the mortgage commitments. So are they living within their means?
With the threat of a housing market correction, your parents in their situation right now, can they afford to NOT cash out by downsizing? If they downsize they can free up cash (let's assume $300-500k) and get rid of their mortgage, the balance of which doesn't have to stay in a low interest bank saving's account which they, a low risk portfolio can return 5-7% with minimal risk. They can then live off this freed up cash until they can access their RRSP's. The downside is the loss of the rental income (which is declared and you are paying income tax on right?) that I'll assume is going towards the mortgage payment right now anyways, and you and your sister no longer have a roof over your head.
I'm not picking on your situation in particular, but it's a very tough situation when people are at or nearing retirement, haven't paid off their mortgage, and relying on their son/daughter/rental income to meet their financial obligations. Of course I'm generalizing based on the given information, your parents may have tons of money in their RRSP's which they are just waiting to be able to get at and what's going on right now isn't really all that relevant.
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Or, the parents plan on giving the house to the kids when they pass on so what's the big deal about asking them to help pay the mortgage?
We don't know the full details to how much they still owe on the house and how much $$$ they have in RRSP. Technically, they can take money from their RRSP's. No rule says they can't. It is Old age pension that they cannot collect till they are 65 IIRC.