Redundancy - Mortgage Question

greytroot

Hi guys will thank all who give constructive advice. Found out today that I am being made redundant in April 2007 with £50k sweetner and £150 pension per week. Now I have no other debts than a £75k mortgage. Do I pay as much off at once or use the money elsewhere. There is little chance of me getting another job with the same salary unless i move away from home?

Cheers.

kathfisch

Hiya!

I'd say at least you have warning of your redundancy and some time to think of what to do

The question is really how much you will need to live on after your redundancy, will you need more than the £150 a week for all your expenses etc? It stands to reason (I'd think) to pay off your mortgage with any lump that's not needed but there's no point paying off too much and having to resort to credit for living expenses. Perhaps you could reduce the mortgage with some of it and keep the rest in a savings account (or some more useful investment that others can advise on!), to allow for living expenses and/or emergencies that require spending. Obviously if you intend to get a job (at whatever salary) afterwards then that will allow you to use more of the lump for the mortgage. You've got some time to look for other jobs etc and have no need to hide it from your employer :cool:

crystal_clear

Hi greytroot

Sorry to hear of the forthcoming redundancy. Can I just ask ? do you not have redundancy cover on your mortgage and if so when you qualify for it? (length of time until they will pay eg: 30 days 60 days ?)

My suggestion would be
If the answer is yes then I may suggest you pay a lump not all of your 50K when they have evaluated your policy and agreed a monthly figure this in turn would have a greater effect on paying off your mortgage quicker as your balance would be a lot less so less interest yet still regular payments being sent in to mortgage company. Thus leaving you to save more of the £150 p/w pension to top up the missing wages until you get used to the lower money factor you are facing without paying off with all 50K and leaving yourself no fall back money.
Hope this helps

Crystal