threat of redundancy.........should i pay off my morgage

deaje

I have a end of term morgage which finishes in 2and half years ,i can afford to pay this off now in a lump sum ,will it benefit me ,my job is under threat of redundancy,and this is my only savings i have no other debts,thanks

ceridwen

In a word - yes.

Maximum amount of "capital" allowed is £6,000 (and I understand literally every single penny you have is counted as "capital" - even money set aside for bills). Mortgage interest is not payable for 13 weeks.

Put it this way - I would and I would do it VERY fast - ie before I knew I was going to be made redundant.

BigSteveLondon

ceridwen wrote: »

In a word - yes.

Maximum amount of "capital" allowed is £6,000 (and I understand literally every single penny you have is counted as "capital" - even money set aside for bills

I don't think this is correct, as any notice period amount is NOT included when determining capital. This is according to CAB, and I used the same formula when sorting out my own JSA following redundancy.

Regards your mortgage. I'm not sure if you can claim anything if you do pay off your mortgage. As this may be considered 'deprivation of capital' to secure benefits, which is an offence. I was considering paying off a loan I have and CAB told me not to.

However if you don't need JSA, and have a job to go to, then relieving yourself of a big monthly out going would be good I reckon.

A minefield LOL.

Regards
BIG

reheat

I paid £20K off my mortgage with my redundancy money, which is a great feeling. Much of the rationale was to significantly reduce monthly outgoings so my payment in lieu of notice stretched further. Only trouble is it's now 7 months and I still don't have a new job yet ... luckily I've been able to find some contract work in the meantime, but its getting thin on the ground now.

So it is inevitably a gamble:-

• On the one hand pay off debt to reduce monthly outgoings and just "get it off your back". Definitely the burning-your-boats approach.
• On the other hand keep the money back in case you need it to tide you over. You won't know if you needed to do this till you get there.

There's no easy answer ... but a lot of soul searching! I guess if you keep the money back till you get a new job, and then pay off your mortgage? Especially given the looming employment meltdown we seem to be heading for now. Best of luck.

deaje

Thanks guys,still not sure what to do for the best
good luck to us all
regards
deaje :huh:

jacklink

i wont pretend to know anything about this issue, but a friend of mine says always owe a little (on housing issues) such as pay it all of if able except for about £1000 say, as this leaves open avenues for lending without going bust

good luck

ceridwen

BigSteveLondon wrote: »

I don't think this is correct, as any notice period amount is NOT included when determining capital. This is according to CAB, and I used the same formula when sorting out my own JSA following redundancy.

Regards your mortgage. I'm not sure if you can claim anything if you do pay off your mortgage. As this may be considered 'deprivation of capital' to secure benefits, which is an offence. I was considering paying off a loan I have and CAB told me not to.

However if you don't need JSA, and have a job to go to, then relieving yourself of a big monthly out going would be good I reckon.

A minefield LOL.

Regards
BIG

As I understand it - O.P. hasnt actually been told they will be made redundant yet - they just "know" they will be. Unless one has been told of impending redundancy (maybe it might be debatable that entering a "consultation period" constituted having been "told" to some extent that one was about to be redundant) - then you're free to do what you please with your money (including paying off a mortgage).

I've had occasions before now when I knew I was going to be made redundant - but I hadnt actually been told I was going to be or had any indication at all - I just "knew" because my intuition had told me. It looks to me as if O.P. is in this position - as in officially-speaking how could she possibly have the faintest idea she is going to be made redundant. Intuition allows one to "get in there first" and do whatever is necessary to protect oneself - in this case pay off the mortgage - and one can do so quite safely with no fear of being penalised for this. After all - since when has the DWP been able to turn round to a claimant and say "We suspect your intuition told you the axe was about to fall" - nothing has been said in writing or even verbally which would indicate that said axe is about to fall......IYSWIM

(I think clarification is needed of the phrase "My job is under threat of redundancy" - as to what EXACTLY is meant by this. ie does O.P. mean "the consultation period has started" or "I have the nasty feeling" or what.)

Ocean007

You could look into whether you can make mortgage overpayments and either start putting in regular sums or one big chunk but not pay off the whole mortgage.

This would mean in an emergency further down the line you can still withdraw a portion of this cash from your mortgage to pay for living expenses should you need to.

I guess all mortgage deals are different but Nationwide certainly allows you to withdraw overpayments at any time with no penalty. You just then have to pay interest on that sum of money again. It's good to know you can access money if you need to and if your mortgage interest rate is higher than the % you're earning on your savings then you're making your money work harder for you.

BigSteveLondon

ceridwen wrote: »

As I understand it - O.P. hasnt actually been told they will be made redundant yet - they just "know" they will be. ...(I think clarification is needed of the phrase "My job is under threat of redundancy" - as to what EXACTLY is meant by this. ie does O.P. mean "the consultation period has started" or "I have the nasty feeling" or what.)

I hear what your saying with this. I agree.
Mind you, I think it would be a bit risky to use such a large amount on a 'feeling' that OH maybe made redundant. What if by some slim miracle OH isn't?

Tough decisions.