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Mom Loan Update with Lots of Thinky Thoughts

June 13th, 2016 at 10:30 pm

So it's been a while since I updated how much money is owed on the 0% interest loan from my mother, what I call our medical mortgage since it originally involved her putting a mortgage on her house so we could pay the medical bills from my 6 surgeries in 5 years way back when. (She paid that off long ago when she had money and before the rest of her money got eaten up with Dad's care before he died, though, so there is no mortgage on the house). I still call it that though.

After the payment on Friday the total is down to $35,000 owed. We have paid down $85,000 and we offered to pay it all off when we sold our house, but she didn't want that, she wanted the monthly income, and she wanted us to save for our down payment, so that's what we are doing. So we now have 2 years and 11 months to go at our current rate of repayment. If all goes well, April 2019 will be the final payment. This is our very last debt owed. We've been out of consumer debt for over a year now, but I still want to get this one done as I hate owing it.

Our goal is to continue to make our $1000 a month payments to her even if DH doesn't get a job right away. With $63,000 some odd dollars in savings between the Emergency Fund and the Farm Down Payment Fund (and I will add to it as long as we can), we feel like we can do this at least for a while.

If he doesn't get a job within four months of his final day, whenever that will be (could be July, could be the end of September, who knows? They certainly don't.), then we will obviously have to revisit that. I would like to continue to try to pay her at least $500 a month for a while after that. I don't know how long we will have to stretch out our savings for, though, if we have to live on it. I think we could go a year to two years, possibly.

I think my mother has become dependent on that money and it does worry me a little. I think she has always thought she would die before it was paid back. Well, she's coming up on 77 and still going strong so I don't think she will. She doesn't have savings, IRAs, or a 401K anymore (that went to Dad's care); she just has social security. That will be her only source of income after the loan is paid off.

Her expenses are low, but as soon as we move she will have to go back to paying the electric, water/sewer, gas, and garbage bills, all things we have assumed paying while living here. The only household bills she's been paying out of her own funds since we moved here have been the landline (which we don't use), her satellite TV (which we don't use), and her internet (we have our own with a different company that is not slow, hers is bundled with her phone and TV service).

I think she thinks everything will miraculously drop down to 1/5 the amount it has been once we move. I think it will go down some, but not as much as she is thinking it will. Water/sewer is a flat rate, so that won't change. She might need to put out only one garbage can a month instead of two, so that could drop, but she might put out 2 anyway because the smell build up might be too bad if she doesn't.

She will still be heating a big old seven bedroom/4 bathroom/3 living room/1.5 kitchen house, whether we are here or not, though without our two freezers (one big, one small) and two fridges, it will drop. She might close off rooms to heat less, but she doesn't seem inclined in that direction. She will still have to pay the same amount in property tax, car insurance (she has two vehicles), home owner's insurance, etc.

If she continues wasteful habits like leaving both of her TVs on all the time whether she is home or not (and they are the type that burn a lot of electricity), still using mostly incandescent light bulbs, washing dishes when the dishwasher is only half full, leaving the stove fan on long after the oven is off, etc., I don't think it is going to be quite as dramatic as she thinks. It certainly won't halve, let alone drop by 4/5ths.

Gas will go down as it will be one person doing laundry and not five and it is a gas dryer and gas hot water tank for our end of the house. Showers will be less, but we take a lot of them at the gym. I wash in cold water except underwear and bedding, she washes all in hot. So yes, it will go down, but not as much as she thinks. Dishwasher use will go down.

Of course she owns the house in full so that is worth probably $400,000 based on comparable neighborhood sales. Maybe $350,000 because of basement flooding issues if she has to sell as is. So if she sells and gets a much smaller place then she would have plenty to live on. But it she doesn't, things will be pretty tight. She doesn't seem to ever want to sell.

I'm not really sure how she'll get by once the loan is paid. I mean, we'll make sure she does one way or another if she tells us, but she is so stubborn she might not tell us. I doubt Social Butterfly will help at all. Former Ice Queen (I need to come up with a new nickname for that sister) would probably help with anything she can that isn't financial, but she doesn't make a lot and has already said she's not moving in with Mom if it comes to that.

If DH's job situation shakes out right, if we can buy a place with enough acreage, if we can convince Mom to sell and move and set up a little new manufactured home (new ones are super nice these days and very energy efficient) or a little stick-built cottage on our land, that would be the best option. I don't want to live in a house with her again, because she is so critical and just...THERE all the time. Having her close but with her own home would be the ideal way of dealing with things.

I guess it is easier to worry about things like that than worry about whether or not DH is going to be able to find a new job before the old one runs out. Not that it will stop me from worrying about that, either.

5 Responses to “Mom Loan Update with Lots of Thinky Thoughts”

  1. Jenn Says:

    It sounds like your mom would eventually be best served by moving into a much smaller house or apartment. Finances aside, the upkeep of a place that big is way too much work and stress for an elderly woman. You may have to work to make it her idea though.

  2. FrugalTexan75 Says:

    I agree with Jenn. It does sound like she may need to seriously consider the idea of selling and moving into something smaller. Whether that be on your property or somewhere else.

  3. rob62521 Says:

    Maybe your mom once you move out will decide the house is too large and will downsize.

    We have friends with a large house they truly cannot afford. People forget the bigger a house, the more is costs.

    Hope DH's job situation works out.

  4. CB in the City Says:

    I think your mom would be happier in a smaller place, with more money to live on, but I know some people find change very hard. She may be avoiding the whole idea of selling & buying, etc., which probably seems very daunting at her age.

  5. LivingAlmostLarge Says:

    I feel the same way about my parents. But what can be done? Nothing. They are ridiculous when it comes to downsizing. They have no idea even when I mentioned changing insurance my mom said Oh i can't.

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