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Pay off mortgage or buy a flat?????
ellie43
Posts: 446 Forumite
Hi
I would be grateful for your thoughts on this. We currently have a mortgage of £27,000 with 7 years left to run. The mortgage is a tracker 0.75% over base (currently paying 1.25%) with £295 early redemption charge.
After a 5 year battle with my insurer my total permanent disability claim has been admitted and I have a lump sum of £45,000 (the policy was taken out to pay off the mortgage in the event of either of us being unable to work, but I have made capital repayments when I was working, so the mortgage is less than the insurance policy). We also have about £20k in savings +£16k in a long term investment (was 20k, lost £4k in the slump)
Sadly my father passed away recently and has left a one bed ex LA flat to me and his other 5 children. The flat needs a new kitchen, bathroom and to have CH installed.
My husband and I are currently in our mid 40's. My husband is a postman. It is likely that I will not be well enough to work again, and I get a ill health pension of 6k (g) pa plus benefit. My husband would like to be able to work part-time when he reaches his mid 50's. I have been considering buying the flat (it is probably worth between £50k to £60k) and renovating it. Then either selling or letting for 10 years and then selling using the capital gain to fund my husbands part time aspirations.
Or would it be better to pay off our mortgage and invest the money saved. Or is there another option I haven't considered?
Thanks
Ellie
I would be grateful for your thoughts on this. We currently have a mortgage of £27,000 with 7 years left to run. The mortgage is a tracker 0.75% over base (currently paying 1.25%) with £295 early redemption charge.
After a 5 year battle with my insurer my total permanent disability claim has been admitted and I have a lump sum of £45,000 (the policy was taken out to pay off the mortgage in the event of either of us being unable to work, but I have made capital repayments when I was working, so the mortgage is less than the insurance policy). We also have about £20k in savings +£16k in a long term investment (was 20k, lost £4k in the slump)
Sadly my father passed away recently and has left a one bed ex LA flat to me and his other 5 children. The flat needs a new kitchen, bathroom and to have CH installed.
My husband and I are currently in our mid 40's. My husband is a postman. It is likely that I will not be well enough to work again, and I get a ill health pension of 6k (g) pa plus benefit. My husband would like to be able to work part-time when he reaches his mid 50's. I have been considering buying the flat (it is probably worth between £50k to £60k) and renovating it. Then either selling or letting for 10 years and then selling using the capital gain to fund my husbands part time aspirations.
Or would it be better to pay off our mortgage and invest the money saved. Or is there another option I haven't considered?
Thanks
Ellie
'Now sir you tell me the world's changed
Once I made you rich enough
Rich enough to forget my name' Youngstown
Eleventh Heaven = no 166 - none yet but 50 weeks to go:cool:
Once I made you rich enough
Rich enough to forget my name' Youngstown
Eleventh Heaven = no 166 - none yet but 50 weeks to go:cool:
0
Comments
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I would pay off the mortgage first as you will have very little income long term and you need to be secure first and foremost.
I personally won't buy a flat to bank on capital growth, but a letting could bring you a monthly income.
Are you willing to be a LL and keep up-to-date with regualtions? Organise work and general maintence? Fill in Tax Forms for the rental income? If you became ill would your husband have the time to deal with this (even renting through an agent you still need to be aware of your responsibilities).
If tenants didn't pay or damaged the flat would you be able to afford the bills or would it be money out of your pocket?0 -
Pay off your mortgage. Sell the flat. Flats can be a nightmare esp ex LA when repairs need doing.0
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Many thanks for the advice poppy and mlz.
The aspect of becoming too unwell to deal with the letting hadn't occurred to me and is an excellent point.
'Now sir you tell me the world's changed
Once I made you rich enough
Rich enough to forget my name' Youngstown
Eleventh Heaven = no 166 - none yet but 50 weeks to go:cool:0
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