Buying a home for/with an aging parent - USA
October 15, 2021 5:42 PM Subscribe
My father has been living on a shoestring for most of my life (divorced), and I've always been worried about how/whether I'd be able to support him in old age. My hometown is a relatively cheap place to buy a house, and I've been wondering for a few years how feasible this would be. Do you have experience doing this or thinking about doing this? I'd love your thoughts on the idea in general and our specific circumstances below.
My parents are both in their early 70s, and both in great health. My mother has a pension and some savings, but my dad's living situation has always been a mystery. I understand from my sister that he gets a miniscule pension from a government job many years ago, and we assume that he is receiving Social Security. He's been visiting the doctor regularly only for the past few years, which suggests that he's taking advantage of Medicare, for which I'm incredibly grateful.
He has been stubborn about money in the past, refusing to let me pay for him to visit when I was working abroad, e.g., not letting me pay for the hotel on a vacation I invited him to join. I definitely need to talk frankly with him about his income and plans (with my mom as well) - I know that I've put it off for ages because I don't live in the same place, am nervous based on previous money conversations, etc., and need to just bite the bullet and go for it. His current living situation is a tiny basement apartment, a place that hurts me even to think about.
Our hometown is a place where it's possible to buy a fixer-upper in a shitty neighborhood for half of my take-home annual pay, and a decent 3-4 br. in a decent neighborhood for 1.5x that amount. My sister and I have talked briefly about the possibility of working together to buy him a house, and my dad has talked longingly of being able to buy a house; sometimes I get on Zillow and poke around and see things that I think he would like and could make his own and could be a place for him to live independently for a fairly long time. My dad is an engineer and has been his own super/mechanic/plumber/electrician for the past 40 years, and so we might even be able to find a place for a bit less that he would enjoy investing sweat equity into to make his own. The idea that a better place to live could help him age happily and healthily in a home of his own is very attractive.
I've daydreamed about finding an affordable house with a few bedrooms and multiple baths so that he could have roommates (who could be company and also help defray the cost of the mortgage), but it would be more expensive to go this route, and I'm less sure about his ability to find/retain roommates at his age. I've mostly been looking at 2-br, 1-ba places. There aren't a lot of ranch-style places in our city, but I'm finding a few that could work.
My partner and I live and rent across the country - while we may eventually buy a place, it's not on our radar for at least a couple of years. I have fantastic credit, enough savings to put a 10-15% down payment on the places that I'm looking at (have discussed with partner), and my sister may be able to contribute as well. I've found some general articles about tax considerations (e.g., buying as an "investment home" and then charging rent, co-signing on a mortgage if the parent can't qualify on their own). From an earlier Ask about aging parents who are stubborn about money, I've learned about BenefitsCheckup.org, which motivates me to think about proposing this to him in concert with talking about SNAP and other assistance programs ("Dad, if we get you on SNAP then you would be able to afford this mortgage out-of-pocket - how awesome would it be to have enough room for your books!"). I will certainly talk with a financial planner at some point if we decide to go ahead with this.
The main concerns I can think of: complexities around multiple-people purchasing - contingencies that always come up in owning a home, which would fall on my sister and I (and our partners) to deal with (and probably more on my sister and her partner, since they live in our hometown) - it would be my first home purchase, and so I might be giving up any first-homeowner credits or advantages that my partner and I might want to use later - potential credit issues for me/my sister if something went wrong (this seems unlikely while my father is alive, if he's on a fixed income) - our hometown isn't a growth market, and so we'd go into this knowing that breaking even would be great, and that we might even lose a little money - it might take a while to sell the house whenever that *does* become necessary, and so we'd be on the hook for paying the mortgage while trying to sell it in future....
Does anyone have any experience doing this? What worked well? What was disastrous? What else should I be thinking about? Thank you!
My parents are both in their early 70s, and both in great health. My mother has a pension and some savings, but my dad's living situation has always been a mystery. I understand from my sister that he gets a miniscule pension from a government job many years ago, and we assume that he is receiving Social Security. He's been visiting the doctor regularly only for the past few years, which suggests that he's taking advantage of Medicare, for which I'm incredibly grateful.
He has been stubborn about money in the past, refusing to let me pay for him to visit when I was working abroad, e.g., not letting me pay for the hotel on a vacation I invited him to join. I definitely need to talk frankly with him about his income and plans (with my mom as well) - I know that I've put it off for ages because I don't live in the same place, am nervous based on previous money conversations, etc., and need to just bite the bullet and go for it. His current living situation is a tiny basement apartment, a place that hurts me even to think about.
Our hometown is a place where it's possible to buy a fixer-upper in a shitty neighborhood for half of my take-home annual pay, and a decent 3-4 br. in a decent neighborhood for 1.5x that amount. My sister and I have talked briefly about the possibility of working together to buy him a house, and my dad has talked longingly of being able to buy a house; sometimes I get on Zillow and poke around and see things that I think he would like and could make his own and could be a place for him to live independently for a fairly long time. My dad is an engineer and has been his own super/mechanic/plumber/electrician for the past 40 years, and so we might even be able to find a place for a bit less that he would enjoy investing sweat equity into to make his own. The idea that a better place to live could help him age happily and healthily in a home of his own is very attractive.
I've daydreamed about finding an affordable house with a few bedrooms and multiple baths so that he could have roommates (who could be company and also help defray the cost of the mortgage), but it would be more expensive to go this route, and I'm less sure about his ability to find/retain roommates at his age. I've mostly been looking at 2-br, 1-ba places. There aren't a lot of ranch-style places in our city, but I'm finding a few that could work.
My partner and I live and rent across the country - while we may eventually buy a place, it's not on our radar for at least a couple of years. I have fantastic credit, enough savings to put a 10-15% down payment on the places that I'm looking at (have discussed with partner), and my sister may be able to contribute as well. I've found some general articles about tax considerations (e.g., buying as an "investment home" and then charging rent, co-signing on a mortgage if the parent can't qualify on their own). From an earlier Ask about aging parents who are stubborn about money, I've learned about BenefitsCheckup.org, which motivates me to think about proposing this to him in concert with talking about SNAP and other assistance programs ("Dad, if we get you on SNAP then you would be able to afford this mortgage out-of-pocket - how awesome would it be to have enough room for your books!"). I will certainly talk with a financial planner at some point if we decide to go ahead with this.
The main concerns I can think of: complexities around multiple-people purchasing - contingencies that always come up in owning a home, which would fall on my sister and I (and our partners) to deal with (and probably more on my sister and her partner, since they live in our hometown) - it would be my first home purchase, and so I might be giving up any first-homeowner credits or advantages that my partner and I might want to use later - potential credit issues for me/my sister if something went wrong (this seems unlikely while my father is alive, if he's on a fixed income) - our hometown isn't a growth market, and so we'd go into this knowing that breaking even would be great, and that we might even lose a little money - it might take a while to sell the house whenever that *does* become necessary, and so we'd be on the hook for paying the mortgage while trying to sell it in future....
Does anyone have any experience doing this? What worked well? What was disastrous? What else should I be thinking about? Thank you!
one thing i would say is that while i was living in a home with my partner with only one bathroom, it was not at all optimum. while he might be the only one living there, that may change in the future as your father gets older - he may need live in care, or you or your sister may have to stay with him for extended periods of time for care. trust me - look for a two bathroom place if it's at all feasible.
posted by koroshiya at 6:57 PM on October 15, 2021 [3 favorites]
posted by koroshiya at 6:57 PM on October 15, 2021 [3 favorites]
Your father sounds like he takes pride in remaining an independent self-sufficient person. Sustaining that identity may be central to his continued wellbeing as he ages. Could you and your sister shape your approach to demonstrate how your father would be helping you out? He sounds like he'd be useful when inspecting properties for purchase. And good tenants are hard to find...
posted by Thella at 8:46 PM on October 15, 2021 [4 favorites]
posted by Thella at 8:46 PM on October 15, 2021 [4 favorites]
Based on what I know (and I am not an expert), I would not put your father's name on the title or the mortgage. There is a good chance that he will end up in a financial posiiton where he will need to go on Medi-caid (low incomes assistance not Medi-care) if he has to be in a nursing home for an extended period time at the end of his life. Good news is Medicaid cover virtually all of his medical expenses. Bad news is he has to spend down his assets to be eligible. Which means that if he co-owns the house, it becomes his asset to be spent before he can be eligible (or Medicare recoups their share when it is sold or at his death). Not a messy situation to get into when he didn't put any money into the house. I don't know if there are similar considerations for other safety net programs but it is worth looking into.
On the other hand, mortgages are more expensive for investment properties or second homes so you have to take that into account.
posted by metahawk at 10:34 PM on October 15, 2021 [12 favorites]
On the other hand, mortgages are more expensive for investment properties or second homes so you have to take that into account.
posted by metahawk at 10:34 PM on October 15, 2021 [12 favorites]
Yes, please be careful about this if there’s the possibility he may ever need to access long-term care paid for by Medicaid. Might do to consult an elder law attorney. When I read this article, about Medicaid recouping its costs, my blood ran cold. Medicaid policies also differ by state, I think.
posted by SomethinsWrong at 2:29 AM on October 16, 2021 [1 favorite]
posted by SomethinsWrong at 2:29 AM on October 16, 2021 [1 favorite]
Be careful about buying a home that needs work on the proviso that your father is the one to do it. I’m sorry to have to bring this up but while you mention he is in great health now, from this age on is where things can go downhill very quickly. The difference between 75 and 80 or beyond in health terms can be huge and he may not have many good years where he is able to do his own plumbing or landscaping or whatever and if that’s the case, who will do this instead and who will pay for it? A house that needs work if he’s not the one to do it might get expensive fast.
posted by Jubey at 3:20 AM on October 16, 2021 [2 favorites]
posted by Jubey at 3:20 AM on October 16, 2021 [2 favorites]
I'm very far from expert in this area but the one thing that leaps out at me is the assumption that your dad will get a mortgage at the age of 70. At the very least, it will presumably be a shorter-term mortgage, making repayments higher, so the maths won't be the same as other mortgages you have known. But the financial advisor I'm sure can talk you through that.
Just a possibility, but you might also find that if your dad is currently covering all his expenses, albeit living marginally, he might be resistant to suddenly taking on a whole load of debt at his age. The feeling that you are living within your means, even if that means a smaller life, is important to some people and he might not want to take on more debt, even if it would make you feel better to see him living in a larger house. That's not to say it's not worth exploring - he might love the idea! But be ready for the fact that he might just have different priorities to you.
posted by penguin pie at 4:46 AM on October 16, 2021
Just a possibility, but you might also find that if your dad is currently covering all his expenses, albeit living marginally, he might be resistant to suddenly taking on a whole load of debt at his age. The feeling that you are living within your means, even if that means a smaller life, is important to some people and he might not want to take on more debt, even if it would make you feel better to see him living in a larger house. That's not to say it's not worth exploring - he might love the idea! But be ready for the fact that he might just have different priorities to you.
posted by penguin pie at 4:46 AM on October 16, 2021
I'm very far from expert in this area but the one thing that leaps out at me is the assumption that your dad will get a mortgage at the age of 70.
If you are in the US, age discrimination for mortgages is illegal. (Of course, that doesn't meant the banks won't find some other reason to claim for a denial when it's really age.)
I'm less sure about his ability to find/retain roommates at his age.
If you are thinking of a Golden Girls situation with several older men, that seems unlikely to happen. However, older people rooming with young people is a thing that can work well. My city has a program that matches older people who want to stay in their homes with younger people looking for cheap housing in exchange for doing some work around the house - not medical stuff, but things like yardwork, cleaning, computer assistance. One of my high school teachers had college students living with her as she aged. All the usual warnings about getting into roommate situations with strangers apply, but if your dad generally likes and gets along with young people, this could benefit everyone involved.
posted by FencingGal at 6:12 AM on October 16, 2021 [1 favorite]
If you are in the US, age discrimination for mortgages is illegal. (Of course, that doesn't meant the banks won't find some other reason to claim for a denial when it's really age.)
I'm less sure about his ability to find/retain roommates at his age.
If you are thinking of a Golden Girls situation with several older men, that seems unlikely to happen. However, older people rooming with young people is a thing that can work well. My city has a program that matches older people who want to stay in their homes with younger people looking for cheap housing in exchange for doing some work around the house - not medical stuff, but things like yardwork, cleaning, computer assistance. One of my high school teachers had college students living with her as she aged. All the usual warnings about getting into roommate situations with strangers apply, but if your dad generally likes and gets along with young people, this could benefit everyone involved.
posted by FencingGal at 6:12 AM on October 16, 2021 [1 favorite]
I can only see this working if you buy the house, he rents it from you, and you use the rent to pay the mortgage. This has obvious implications for your own finances and youd need to consult the right professionals.
posted by DarlingBri at 6:58 AM on October 16, 2021
posted by DarlingBri at 6:58 AM on October 16, 2021
Is your dad by any chance a veteran? If so he may be able to buy a house with minimal down-payment.
You can absolutely get approved for a mortgage if your only income is a pension and social security, I just did.
Have you looked at condos? They may be cheaper and easier for someone his age. Also look into communities that only allow people over 55 or whatever that are not "independent living with steps up to full nursing home care", the latter of which are often quite pricey. In my current town there is a very well-maintained trailer park that only allows older people. The one I've seen advertised for sale there is very nice and has its own little yard.
I'm around your father's age and really really have no interest in having housemates, he may not either.
The other thing to look into is subsidized senior housing where the rents are based on a percentage of income. I have some friends who live in those. One friend has a beautiful apartment in downtown Asheville. Feel free to me-mail me if you want to know more about finding such options for your father.
posted by mareli at 9:12 AM on October 16, 2021 [2 favorites]
You can absolutely get approved for a mortgage if your only income is a pension and social security, I just did.
Have you looked at condos? They may be cheaper and easier for someone his age. Also look into communities that only allow people over 55 or whatever that are not "independent living with steps up to full nursing home care", the latter of which are often quite pricey. In my current town there is a very well-maintained trailer park that only allows older people. The one I've seen advertised for sale there is very nice and has its own little yard.
I'm around your father's age and really really have no interest in having housemates, he may not either.
The other thing to look into is subsidized senior housing where the rents are based on a percentage of income. I have some friends who live in those. One friend has a beautiful apartment in downtown Asheville. Feel free to me-mail me if you want to know more about finding such options for your father.
posted by mareli at 9:12 AM on October 16, 2021 [2 favorites]
My mother had a succession of stories about her elderly neighbours being shipped across country " to be nearer the grandchildren". They finished up in a strange place far from their friends and the familiar knowns of shops, landscape and community; lonely in a way that immediate family only partially compensated. If you do go ahead, assume this is your dad's last move and make sure there is wheelchair access everywhere incl the bathroom. FencingGal is defo onto something with a semi-independent space for a younger fitter roomie. Good luck, it's ahead of most of us.
posted by BobTheScientist at 10:40 AM on October 16, 2021
posted by BobTheScientist at 10:40 AM on October 16, 2021
You’ve gone really far down the path of solving the problem before you really understand the problem. I think it would make sense for you and your sister to sit down, in person or via video, and have an explicit conversation with your dad about his health, finances, and wishes.
A few things to consider: At your dad’s age, he might not live independently for long. He may not be up for a true fixer. The roommate situation sounds pretty complicated. I’m also concerned about you buying a house for your dad before yourself.
In the bigger picture, if you have money to throw at this, what would it mean instead to give him $100 or $200 a month towards rent or other expenses?
posted by bluedaisy at 1:37 AM on October 17, 2021 [1 favorite]
A few things to consider: At your dad’s age, he might not live independently for long. He may not be up for a true fixer. The roommate situation sounds pretty complicated. I’m also concerned about you buying a house for your dad before yourself.
In the bigger picture, if you have money to throw at this, what would it mean instead to give him $100 or $200 a month towards rent or other expenses?
posted by bluedaisy at 1:37 AM on October 17, 2021 [1 favorite]
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They also often have levels of care with the idea that as the elderly have less ability to care for themselves they move into smaller areas with access to nursing.
I know that isn't always appealing especially if your dad isn't comfortable taking his mortality, but the most basic areas do seem often to be just like buying a house with access to lawn care and snow shoveling.
posted by aetg at 6:21 PM on October 15, 2021 [4 favorites]