I've inherited some money

coldstreamalways

Hi all, just after a bit of advice really. I have a mortgage with Halifax at 5.8% (first time buyer). The fixed rate will end this year and I'm after another fixed rate (so I know where I stand with finances. The mortgage was for £211500 and now stands at £208000. The value of the property was £235000.

I have inherited £20000 and I would like to use this to pay off a lump sum. I'm worried that there is something I haven't thought about though so please can you give me your experiences?

Thank you

Daft_Pegasus

I'm not really sure what advice you're after but here's my take on it.

Firstly you need to check with the Halifax on whether you can over pay because you may have to wait until the fixed rate period finishes.

If you use all £20k to reduce your mortgage it brings your LTV down to 80% which is good because it gives you much more choice when it comes to negiotiating a re-mortgage. However do you really want to put all of it towards paying down your mortgage? That's a question only you can answer but if it were me I'd us part of it to pay down the mortgage and part for something else.

The one thing you must take into account is the current value of your house. Whilst it was £235k when you bought it, it might not be now which will affect your LTV and thus your options when it comes to a new mortgage.

dimbo61

Check with the Halifax if you can overpay and any limits ( 10% a year, £500 a month ETC )
Once you know you can make overpayments up to the max and invest any money left in a high interest account until your deal runs out and then pay the rest off the mortgage.
Hopefully Halifax will be able to offer you a new deal and with a LTV of 80% you may get a good rate.
You will not get 5.8% interest from any savings account at the moment so unless you need the £20k to pay off other debts clear some of the mortgage.
GOOD LUCK