As our parents age, they may begin to experience financial challenges that impact their ability to pay off their mortgage loans. This can be due to a variety of factors, such as the rising cost of living, mounting medical bills, or a fixed income that is unable to keep pace with inflation. According to Zorayr Manukyan, as their adult children, we may feel the urge to help our parents in any way we can, and one of the most effective ways to do that is to assist them in paying off their mortgage.
How (And Why) To Help Your Parents Pay Off Their Mortgage? Zorayr Manukyan Answers
Why Should You Help Your Parents Pay Off Their Mortgage?
The first and foremost reason to help your parents pay off their mortgage is to ensure that they can live comfortably and without stress, says Zorayr Manukyan. A mortgage payment is usually the largest expense a person pays each month, and if your parents are struggling to make payments, they may have to sacrifice other important things like healthcare or setting aside retirement savings.
Moreover, paying off your parents’ mortgage can be a long-term investment in your own future. If you inherit the property, you can save a lot of money on interest payments and can have a valuable asset at your disposal.
How Can You Help Your Parents Pay Off Their Mortgage?
1. Refinance the Mortgage
The first thing you can do is to help your parents refinance their mortgage for a lower interest rate. This can potentially reduce the monthly payment, making it easier for them to make the payment.
2. Pay Extra on Their Behalf
Another way to assist your parents is to pay their mortgage payment on their behalf. You can either choose to pay the entire payment each month or split it with your siblings. This can be a great way to relieve the financial burden on your parents.
3. Consolidate with a Personal Loan
Another option is to consolidate your parents’ debt with a personal loan and use the funds to pay off the mortgage. The interest rate on the personal loan will be lower than that of the mortgage, which can save your parents thousands of dollars over the loan’s life.
4. Rent Opportunities
Perhaps your parents have a large home with an extra room that could be rented out. This not only generates extra income but it can also help pay off the mortgage more quickly. Additionally, if you are currently renting, you could move in with your parents and pay rent directly to them. This can give them a boost in income and reduce their overall expenses.
5. Opt for a Reverse Mortgage
If your parents are over 62 years old and have significant equity in their home, they can opt for a reverse mortgage. This converts their home equity into cash, which can be used to pay off the mortgage. However, it’s important, as per Zorayr Manukyan, to note that there are pros and cons to a reverse mortgage, and you should consult a financial expert before deciding to go down this route.
Zorayr Manukyan’s Concluding Thoughts
Helping your parents pay off their mortgage is an investment in their future, and it can give them the peace of mind they deserve. But ensuring that you are making the right financial decision for your parents requires careful consideration and research. Zorayr Manukyan recommends discussing the options available with your siblings, consulting with a financial advisor, and selecting the method that works best for your parent’s specific situation.