How should I best manage this money?

ficino

I have just taken out a mortgage and have the cheque sitting here for £50k to refurbish my property. I have £40k in savings and expect the refurb will cost in the region of £70k (My builder should be giving me a quote in the next few weeks). I am supposed to make my first payment on the mortgage at the beginning of April of £350 pm, and don't expect the building work to start until May at the earliest. To add to the mix, I am being made redundant at the end of March with a redundancy payment of £12k.

I was hoping to delay the first mortgage payment and draw down a more accurate amount (from builder's quote) in about 4 months time when my savings have been spent on the building work, but I don't know if I can go back to the mortgage company. Or should I bank this cheque and treat it as a loan given that I'll be out of a job in a few weeks? But what if I don't get another job (I could probably live for 8 or 9 months on the redundancy money). Should I overpay the mortgage (its a repayment), put the money in an easy access account (I have no other debts). What is the most cost effective thing to do? Any advice is very much appreciated as I'm in a panic over the redundancy.

DiggerUK

ficino,
You need to put all expenditure on hold. Apologise to the builder and explain why.
Put all your money in best easy access for now, and get into a financially defensive position.
You can start to make plans once you have your next job lined up.
Until a new job arrives sit tight, relax, and then plan your next move.

Getting p1ssed would do no harm for now though.
Best of fortune.

ficino

I have to get the house refurbished as it becoming uninhabitable. I just wondered if anyone had any views on how best to manage the money

redpete

I'm not sure why you think you'll be able to delay making monthly payments on the mortgage. Even if you haven't cashed the cheque they will have made allowance for it in their books.

Do you have a flexible payment arrangement on the mortgage, so could you pay most (or all of it) directly back into the mortgage account and draw on it when you need it? If so, and the mortgage rate is higher than instant access savings offer, then do this.

If not I'd just put it into an instant access savings account (or more than one to avoid having all your savings with one institution as you have more than the maximum amount protected under Gov guarantees).