I'm here looking for help dealing with my parents. My parents divorced several years ago, in their late fifties, after almost 30 years of marriage. We were always a very upper-lower middle class family; my mother was a stay at home mom, and my father had a white collar government which he lost weeks after 9/11 and just as he was entering his prime earning years.
Income & Assets
My father has a pension that is not inflation adjusted. He splits this with my mother. Once split the pension is a sum that hardly covers the rent in this area (Metro Boston).
My father also has a part time job doing consulting work, though to hear my father tell it the small firm he works for is always on the verge of going under. This consulting work is my parents primary means of support.
My mother does not work. In addition to my father's pension and alimony she collects Social Security (her own, from before my parents were married) and Disability.
While in government my father was not required to pay into Social Security. He has been paying into the system in the last decade as a consultant.
Neither has any significant taxable or tax-deferred savings. Last year my mom cashed out the half of a traditional IRA she received from my dad to buy a used Toyota when her car died.
The Family Home
My mom lives alone in the family home. My parents still jointly own the family home, neither one could afford to buy the other out at the time of the divorce. Furthermore there's some kind of loan outstanding against the house. The balance of the loan is still more than $250k and the funds were used to put my sisters through college and on a partial renovation of the home after my father lost his job in the 2000s. Neither parent has really been able to explain the terms of the loan to me but they both swear that at some date in the near future it will be due and they'll be forced to sell the house to repay the bank. My dad is now telling me that the bank may call the loan early because property values are so strong in our area (Metro Boston, a 10 min walk to the MBTA, in a nice residential neighborhood). He sincerely believes a banker will show up at my mother's doorstep any day now with the local sheriff and demand $250k or else begin eviction proceedings immediately.
Questions
Is anyone familiar with the kind of loan my parents may have taken? I'm young (33) and don't own a home. I've asked friends who own and they're all baffled by the concept of a loan with a balloon payment and a due date. It doesn't make any sense. I believe that at one point my parents did own the home and then took out money against the house. I also know my mom pays the bank every month for the house.
I would like to pay a third party to help my parents figure out what to do with the home. What kind of professionals exist? Are nonprofits a better choice? The person would need to provide financial advice to my father, who has never been wrong about anything, and my mother, who cries in the face of any uncertainty. (Can you see why I don't want to be the man in the middle?
) They would hopefully also be familiar with whatever government services are available for low income seniors.
