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Whaddowedo??
BazB
Posts: 9 Forumite
We have an interest-only mortgage of £140,000 (costing a mere £100+ per month currently).
We have a one-off legacy of £130,000 en route.
We are otherwise solvent, with stable jobs (not that well-paid, though!)
So... what do we do? Pay off the mortgage OR buy another property for cash and use the income from renting it out?
What would YOU do??
We have a one-off legacy of £130,000 en route.
We are otherwise solvent, with stable jobs (not that well-paid, though!)
So... what do we do? Pay off the mortgage OR buy another property for cash and use the income from renting it out?
What would YOU do??
0
Comments
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i would pay off the mortgage and enjoy mortgage free bliss!Mortgage Start jun 2007 £88500 Outstanding Balance £51000
Overpayments 2007 Nil 2008 £1040 2009 £7853 2010 £10000 2011 aiming for £18000 (6k so far)
The Early Bird Gets the Worm, but the Second Mouse Gets the Cheese!!0 -
Baz
Remember, only £100k cover for joint account with one banking license, so, I would split the monies across two separate banking licenses first thing.
Secondly, do consider that with savings of that magnitude you'll not get any means tested benefits if you lose your jobs; you'll be forced to eat into the savings somewhat.
Personally, if you intend to stay in the property you are in now, then look to pay a sizeable amount off the capital, but, do this carefully to minimise charges applied if possible.
Do you have reasonable pension cover?
Do you have savings set aside and building them for planned costs ahead like holiday, replacement car etc?
These will all influence how much of the inheritance you choose to pay against the mortgage and that used in other aspects. However, above all it should make a big impact for you.0 -
Thanks Stuart and LittleMrTinkle. A real dilemma, isn't it? So many options and potential problems. We know we're lucky to be in this position but it does still present problems!
Our inclination is to buy another place to rent out (while our mortgage interest is so low), then sell at a later date to clear our own mortgage if/when the interest soars to an unacceptable level. That way, the rental income will eat into our current outstanding mortgage and, depending on how many years it runs, could reduce it substantially and give us a nice sum extra when we do sell and pay off the rest of the mortgage.
Good advice about splitting the capital, Stuart.
Fortunately, we have no 'early settlement' penalties with this mortgage.
Thank you both again.0
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