I have some experience in this area in our families. DH and I already talked about it and know what we will do when the time comes.
Originally Posted by Leta
She is better off renting. If she pays $500/mo for a subsidized senior apartment, she is going to have to pay a phone bill and that's it. No taxes, no insurance, no heart attacks in case the furnace breaks, etc. Our mortgage payment is $316/mo (on a 15 year note at 5% interest) and it costs a heckuva lot more than that for us to live in our house. We spend $1200+ on property taxes, $430 on homeowner's insurance, and $300/mo year round on utilities. We spend $750/mo to live in our house. (More, really, since we pay more than the minimum mortgage payment, but I digress.)
There are 4 (maybe more) senior high rises in my county, and they all accept residents at age 62. I would help your mom by doing the legwork to get her into a subsidized apartment.
Leta's point about the other costs of ownership after the mortgage payments is very valid.
Originally Posted by annekevdbroek
#3 as a first choice, and #2 only if you can afford to make the mortgage payments yourself (w/o your mom paying rent). Honestly, renting makes by far the most sense to me. It the not to distant future she may need to move again (e.g. if her income goes down, she needs assisted living) and such. The fact that she raised you and helped with college really doesn't figure into this. It was nice that she was able to do those things, but you can't bring financial ruin on yourself or her now because of that past decision on her part to help you.
Agree. If you do #2, go into the decision based never seeing rental payments. She could lose her job, get a lower paying one, have the best of intentions to pay you but the reality is a lifetime of poor financial choices will likely continue. Can you, would you and your DH let her live there free if worst comes to worst?
OP - you mention a string of many relationships. If you do option #2, I would absolutely not allow and new "relationships" to live in the house without paying their fair share of rent.
#3 would be my first choice.
"Throwing away money on rent" is not throwing money away. It costs money to live, whether you own or rent.
People say renting is throwing money because they are hoping their homes will significantly appreciate over the years.
Sadly, that is proving not to be true in current times. Also, long mortgage terms mean very little money is going towards principle and people are not gaining equity.
Saving the difference between renting and owning costs can be as financially prudent as owning. (This assumes a reasonable cost of living area where renting versus owning is in line.)
Leta's example of how much more it costs to own over renting is worth evaluating in the OPs area.
Futher, so many people are in the position now with mortgages they can't afford. The reality is, all they are doing is renting their house from the bank because they borrowed too much money, took out the loan for too long of a term, didn't put any money down, paid too much and never had any equity or got hit by dropping home prices, etc. They have no equity, no ownership position and the added burden of maintenance, real estate taxes and insurance costs.
From my post, I bet you can figure out which option DH have already decided upon for any relative that will need help....