Lump sum off mortgage

kk57oscar

My daughter has just received £10,000 she wants to know if it will be worth paying this off her mortgage or saving it.
They are with Northern rock with a 4.9%. They are in negative equity of app £9000 but want to move by the end of the year.

getmore4less

They will need a deposit to move.

with 9k NE and fees the 10k won't be enough.

Any other debts?
Emergency fund?
Jobs secure?

kk57oscar

No other debts, or savings. Both jobs as secure as can be.

Is is wiser to keep the money and save more for deposit and not pay off?

getmore4less

Probably worth keeping a bit back and using the rest to reduce the debt but only if there are no penalties. There are no savings available at that rate

it is the net situation that counts when moving

So what value house are they looking at, need at least 10% of that

Currently if they sold they would be lucky to come away not owing someone.

then they need deposit and buying fees.

They need a reality check about moving end of year.

kk57oscar

Thanks for the info, will advise them on what you have said.