Nearly divorced and very confused!

dazed04

Finally agreed divorce settlement after years of wrangling:) Now I have to see Halifax re mortgage and despite hours of reading these boards I'm still very confused!

I get the house (£200,000) and IO mortgage of £60,000. Also endowment now worth £24,000. Mortage and endowment (both previously joint) mature next Feb.
I've savings of £58,000 and only debt is lawyers fees which I don't know yet but I'm thinking will be around £20,000:eek:
I'm nearly 50 , and would rather be mortgage free asap but feel very anxious without a nest egg. Should I pay off amap from savings? Are there very flexible mortgages payable very early -maybe in 5years or so? Is it best tax wise to keep mortgage as I'll soon be at higher rate? Do I stick with Halifax-if not who? Sorry, I'm all questions and I don't know any answers. Grateful for any suggestions.

getmore4less

OK lets look at this in a different order.

TAX:

No tax benifts from a mortgage these days for owner occupiers.

Saving will get hit for the HRT if not in ISA's
pension contributions reduce HRT liability
HRT is at over £43k

The nest egg:

You either keep the one you have(potentialy income taxed) and pay a mortgage
OR
have small/no mortgage and save a new one(ISAs etc)

Flexable mortgages:

An offset might fit your needs they are low cost to set up and give you options to not have to make up your mind on what to do with the money.
(LTV, salary, age probably OK for a remortgage upto 15y if no defaults)

I think you need to spend some time thinking about what you want and where you want to be.

Might be worth a IFA but do watch for fees or advice that give commisions.

Anything available through your job?

£20k for an argument, who lost?

dazed04

Thanks, getmoreforless.
Will look in to flexible mortgage option I think. All but £10,000 savings currently in ISAs so safe from tax. Agree only real winners in this argument are the lawyers but my risk was loosing our home against a supposed huge negative equity in his business so no real choice but argue. Would have settled for this years ago! Not sure where to start looking for IFA?

getmore4less

OK, if most of your savings are in ISA then that makes the offset an option that needs more consideration.

There are a few lenders that allow ISA in the offset pool but the one I do know Barclays has not been the most competative offset mortgage provider.

dazed04

Thanks. I have just moved ISAs to santander for much better rate so will have a look at their offset mortgages if there are any!

dimbo61

You need to take a long hard look in February and decide if its worth paying any fees to get a new mortgage.
You have the savings and endowment to clear the mortgage and start to build up savings in ISA,s as you will no longer have a mortgage ( even IO ) to pay.
You took out the endowment in order to pay off the mortgage and they are not doing well in general so you need to keep until maturity and clear your only debt.
I would love to be Mortgage Free by 50

dazed04

Yep. Mortgage free does sound good! Not sure if I'll be allowed to just carry on with existing mortgage and endowment until Feb after taking his name off deeds? That would give me some time to think and see how finances are with my new job. Was beginning to think of paying most of mortgage off, maybe leaving around £10000 over 5-10 years. Is that doable?

dimbo61

You need to speak to the lender but cant see any reason why not.
But you need to speak to your lender.
Dont forget you will be paying interest and maybe even fees so if you can clear that mortgage.