I was hoping for some advice on a situation.
My grandfather has a reverse mortgage on his home at around 8% for 140k.
My mum is about to sell her home and rent and we anticipate after paying off her mortgage and other debt she will have around 280k in the bank.
Both mum and my grandfather receive the pension, my mums is a carers pension for my grandfather.
In my head the smartest thing to do is when mum settles is pay out my grandfathers reverse mortgage. The reason being this is her inheritance, she is an only child and the house has been left to her in the will.
Failure to do this will likely mean by the time my grandfather passes away the bank will almost own the entire house. So by then the money she has from the house will be spent and now she has no inheritance!
So I see it as instead of mum putting the money in the bank at 2.5%, she pays of her inheritance currently losing 8%.
My concern however is how centrelink will view this and perhaps the ATO? Mum is not asking for my pop to return the money, she will only receive the benefit when the asset passes back to her upon his death.
We are arranging a meeting with centrelink to discuss our plans but wanted to raise it here first.
My grandfather has a reverse mortgage on his home at around 8% for 140k.
My mum is about to sell her home and rent and we anticipate after paying off her mortgage and other debt she will have around 280k in the bank.
Both mum and my grandfather receive the pension, my mums is a carers pension for my grandfather.
In my head the smartest thing to do is when mum settles is pay out my grandfathers reverse mortgage. The reason being this is her inheritance, she is an only child and the house has been left to her in the will.
Failure to do this will likely mean by the time my grandfather passes away the bank will almost own the entire house. So by then the money she has from the house will be spent and now she has no inheritance!
So I see it as instead of mum putting the money in the bank at 2.5%, she pays of her inheritance currently losing 8%.
My concern however is how centrelink will view this and perhaps the ATO? Mum is not asking for my pop to return the money, she will only receive the benefit when the asset passes back to her upon his death.
We are arranging a meeting with centrelink to discuss our plans but wanted to raise it here first.