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  • FIRST POST
    • Welshy16
    • By Welshy16 21st Nov 17, 9:46 PM
    • 5Posts
    • 0Thanks
    Welshy16
    Money from sale of a house
    • #1
    • 21st Nov 17, 9:46 PM
    Money from sale of a house 21st Nov 17 at 9:46 PM
    Evening all. our sale of our house is due to go through soon leaving us with around £120k.

    We have a mortgage on a new property of £228k on a 2 year fix from October paying 1.4% interest. I can overpay by 10% of loan amount per year.

    We have credit cards of around 6k but paying no interest until June 2019

    No other credit agreements.

    I've mentioned buying other property to my other half and she's not keen.

    I've used the calculator on this site about whether i should overpay my mortgage or not and it seemed to indicate if i can get something with interest of over 1.8% i shouldn't overpay.

    i can't see us needing this money in the short term so any ideas on where to put it?

    I have a Santander 1-2-3 account so i'll keep 20k in there probably at the 1.5% for easy access emergencies so prob have around 100k to play with maybe.

    grateful for anyones comments on what to do/not to do!

    Cheers
    Dave
Page 1
    • Sarastro
    • By Sarastro 21st Nov 17, 9:52 PM
    • 333 Posts
    • 246 Thanks
    Sarastro
    • #2
    • 21st Nov 17, 9:52 PM
    • #2
    • 21st Nov 17, 9:52 PM
    What's your pension situation like? Very tax efficient to put extra into pension if you don't need it now.

    I think I'd end up doing a mixture of things thought tbh.
    • Welshy16
    • By Welshy16 21st Nov 17, 10:06 PM
    • 5 Posts
    • 0 Thanks
    Welshy16
    • #3
    • 21st Nov 17, 10:06 PM
    • #3
    • 21st Nov 17, 10:06 PM
    I'm a Civil Servant and wife is NHS so pretty good to be fair. We're both early 30's age wise.
    • Money Help
    • By Money Help 22nd Nov 17, 7:45 AM
    • 34 Posts
    • 15 Thanks
    Money Help
    • #4
    • 22nd Nov 17, 7:45 AM
    • #4
    • 22nd Nov 17, 7:45 AM
    You say you don't need the money in the short term but have you thought about when you will need the money and what you will use it for?

    If you don't need it for the next 10 years plus you could consider investing the cash as investment returns will likely outperform cash savings rates over the long term (although not guaranteed).

    In terms of being tax efficient it's always good to use your ISA allowance each year and possibly pensions if you are prepared to lock it away until you 'retire'.
    • ThePants999
    • By ThePants999 22nd Nov 17, 10:57 AM
    • 900 Posts
    • 1,054 Thanks
    ThePants999
    • #5
    • 22nd Nov 17, 10:57 AM
    • #5
    • 22nd Nov 17, 10:57 AM
    +1 for investment. Higher risk rewards higher return, so if it wouldn't be a disaster to lose some of it, invest. By way of example, the FTSE all-share is up 10% over the last year.
    • greenglide
    • By greenglide 22nd Nov 17, 3:21 PM
    • 2,919 Posts
    • 1,893 Thanks
    greenglide
    • #6
    • 22nd Nov 17, 3:21 PM
    • #6
    • 22nd Nov 17, 3:21 PM
    the FTSE all-share is up 10% over the last year.
    But, for God's sake, don't invest in that index. A 100% UK investment like this would be atrocious.

    It would have been much better to quote the FTSE all world or similar as an example.
    • Welshy16
    • By Welshy16 23rd Nov 17, 10:10 PM
    • 5 Posts
    • 0 Thanks
    Welshy16
    • #7
    • 23rd Nov 17, 10:10 PM
    • #7
    • 23rd Nov 17, 10:10 PM
    Yeh i've had a nose at investments. S&S ISAs etc but my wife again isn't keen. Lets just say she doesn't like a gamble.

    I guess the safe option is to lock it away for 1 year fixed which will then expire by the time our remortgage is due in two years and put most of that money back into the house to lower the LTV.
    • capital0ne
    • By capital0ne 23rd Nov 17, 11:31 PM
    • 146 Posts
    • 79 Thanks
    capital0ne
    • #8
    • 23rd Nov 17, 11:31 PM
    • #8
    • 23rd Nov 17, 11:31 PM
    Open two more Santander 123 accounts so you can earn 1.5% on £60k.

    Put £40k into an S&S ISA each in a Vanguard Lifestrategy 80 ACC fund each.

    Put the remaining £20k into Premium bonds

    Good luck
    • Eco Miser
    • By Eco Miser 23rd Nov 17, 11:49 PM
    • 3,220 Posts
    • 2,982 Thanks
    Eco Miser
    • #9
    • 23rd Nov 17, 11:49 PM
    • #9
    • 23rd Nov 17, 11:49 PM
    Yeh i've had a nose at investments. S&S ISAs etc but my wife again isn't keen. Lets just say she doesn't like a gamble.
    Originally posted by Welshy16
    Most savings accounts, over the long term, aren't a gamble - they're certain to lose against inflation.

    A well-diversified portfolio is a gamble, with odds in favour of beating inflation by 2% or more, but the possibility of being down when you need the money.
    Eco Miser
    Saving money for well over half a century
    • kidmugsy
    • By kidmugsy 24th Nov 17, 12:05 AM
    • 9,893 Posts
    • 6,671 Thanks
    kidmugsy
    We're both early 30's age wise ... prob have around 100k to play with
    Originally posted by Welshy16
    I suggest you open a LISA each with a view to being able to withdraw all the money tax-free from age 60 onwards - it might allow you to retire early without suffering an actuarial reduction from taking a DB pension early. Because it's only a modest £4k p.a. each you might manage to persuade your wife to have it invested in some sort of global equity tracker. If either of you pays 40% income tax then you might be wise to avoid it by contributing to a personal pension of some sort, again with the hope of making early retirement practical.

    With £100k I'd also suggest that you keep say £5k to £10k in gold sovereigns if you have somewhere safe to store them. You should also look at using the regular saver accounts that pay 5% p.a. For example, Santander do one. See also Nationwide.

    As for the rest, if you really want to hold it in cash with a view to using it largely to pay off the credit cards and a chunk of the mortgage, you could do worse than park it in Premium Bonds: up to £50k each is allowed.

    Maybe you'd be wiser to put more into equities via conventional S&S ISAs, but not if it worries your wife. Maybe you will be lucky; if stock markets collapse that would give you a good time to invest.

    Many people might reckon that with the job security you presumably have you might be being too cautious by looking at debt reduction rather than investment. The purpose of wealth, however, is to provide comfort and security, and only you two can judge how best to find those.
    Free the dunston one next time too.
    • EJS_Superted
    • By EJS_Superted 24th Nov 17, 10:41 AM
    • 41 Posts
    • 19 Thanks
    EJS_Superted
    Do you both plan to work full time until retirement age, presumably 70? If not I would be considering pension options/lifetime ISA.
    • Thrugelmir
    • By Thrugelmir 24th Nov 17, 4:16 PM
    • 56,183 Posts
    • 49,567 Thanks
    Thrugelmir
    Evening all. our sale of our house is due to go through soon leaving us with around £120k.

    We have a mortgage on a new property of £228k on a 2 year fix from October paying 1.4% interest. I can overpay by 10% of loan amount per year.
    Originally posted by Welshy16
    What was your thinking at the time?

    Why not simply borrow less over a shorter term.
    “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”
    ― Warren Buffett
    • wheelz
    • By wheelz 25th Nov 17, 3:47 PM
    • 237 Posts
    • 49 Thanks
    wheelz
    Why would you want to have debts (the mortgage). Why not pay the new house off as far as you can with the money and pay less on your mortgage?
    • badger09
    • By badger09 25th Nov 17, 4:14 PM
    • 5,567 Posts
    • 4,876 Thanks
    badger09
    Why would you want to have debts (the mortgage). Why not pay the new house off as far as you can with the money and pay less on your mortgage?
    Originally posted by wheelz
    Because, financially, that might not be the best use of OP's money. Though to some people, the psychological benefit of having a much smaller mortgage, outweighs the straight financial benefit comparison.
    I'm a supporter of dunstonh
    • Welshy16
    • By Welshy16 29th Nov 17, 3:03 PM
    • 5 Posts
    • 0 Thanks
    Welshy16
    thanks for all of your replies. The sale of the house goes through tomorrow and i'm still none the wiser.

    My immediate thoughts are to put 60k each in an 18 months fixed term bond at 1.87%. This will tie us over until the 2 year fix comes to an end then we can decide on where we go next with the mortgage we currently have.
    • cloud_dog
    • By cloud_dog 29th Nov 17, 3:17 PM
    • 3,302 Posts
    • 1,861 Thanks
    cloud_dog
    I think you need to sit down and really consider what you are doing with your lives, what you are going to do with your lives (as much as can be reasonably defined). You really haven't given much to go on wrt what your thoughts or plans are.

    Lets take pensions as an example, you've sort of dismissed this as you are both on reasonable pension plans (compared with minimum DC plans for example) but, have you thought about the implications of retiring early or are you both happy to work through to 65 (or whatever it is or maybe in the future)?

    So, if you thought maybe I really cannot see myself sat at this desk until 65 then, putting money in to a SIPP (for example) would allow you to draw on that money from age 55 (currently). I know you are able in the NHS/CS to draw pensions early but there will be a reasonable sized deduction in the pension to do this.

    Do you have kids; do you plan to have kids?

    What is the type and state of the property you have purchased; might you need to do some remedial work to it; might you want to extend/building work?

    What is your mortgage LTV ratio? Could you plan to pay off some capital (after any tie in period) so as to get you to a lower LTV ratio and therefore lower IR?

    Soooo many questions, so few answers
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • kcam
    • By kcam 29th Nov 17, 4:28 PM
    • 7 Posts
    • 1 Thanks
    kcam
    Premium Bonds
    Please can I just ask why Premium Bonds? I also have some money to invest. Thanks
    • kcam
    • By kcam 29th Nov 17, 4:34 PM
    • 7 Posts
    • 1 Thanks
    kcam
    good luck
    Well you are in a v nice position there for relatively young people, so good luck, well done - make sure you enjoy some of it without worrying too much about the long term stuff - great advice on here but have some fun too, life is short!
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