Suggestions for lump sum

tonytheviking

Hello all,

I'm looking for some advice, and some suggestions.

I am aged 36, and have a young family. I recently received a lump sum payment following a critical illness claim for cancer. The lump sum covers the mortgage and there is a bit extra.

My prognosis is good, and I'm back at work. So in some ways, I'm in a good position.

My dilemma is whether to pay off the mortgage and live mortgage free, or to take out a smaller mortgage and buy the house of our dreams. My wife is keen on the second option, but I'm aware that we would be taking some risk. If I get ill again, I'm not insured, so the new mortgage would be in my wife's name, and she would need to be able to pay it off on her part-time salary.

Any suggestions are welcome. Of course, the decision is very personal, but I'm interested to canvas opinions, and am welcome to hear creative ideas.

Thanks,
T

GMS

tonytheviking wrote: »

Hello all,

I'm looking for some advice, and some suggestions.

I am aged 36, and have a young family. I recently received a lump sum payment following a critical illness claim for cancer. The lump sum covers the mortgage and there is a bit extra.

My prognosis is good, and I'm back at work. So in some ways, I'm in a good position.

My dilemma is whether to pay off the mortgage and live mortgage free, or to take out a smaller mortgage and buy the house of our dreams. My wife is keen on the second option, but I'm aware that we would be taking some risk. If I get ill again, I'm not insured, so the new mortgage would be in my wife's name, and she would need to be able to pay it off on her part-time salary.

Any suggestions are welcome. Of course, the decision is very personal, but I'm interested to canvas opinions, and am welcome to hear creative ideas.

Thanks,
T

Sorry to hear of your illness but thankfully you seem to be on the mend.

You are fortunate enough to have had the foresight to take out good insurance cover. Far too many people do not consider this to be important, yet insure their precious mobile phone and their cat!

The decision you need to make is a huge one and is something you should sit down and discuss with your family. Cover all pro's and con's.

Why not pay off the mortgage anyway as this is the reason you had the cover. If you decide to move you could raise another mortgage.

You could look to invest in a Buy to Let property or 2 if you so desired.

Do not do anything hasty, this is a massive decision for you. As you have said you are not as well covered if something were to happen again.

Thrugelmir

Your family is young. A good opportunity to provide them with security for their growing years.

If you clear your existing mortgage then you can save for a dream home without the worry of a debt burden.

sophievenusdoom

tonytheviking wrote: »

Hello all,

I'm looking for some advice, and some suggestions.

I am aged 36, and have a young family. I recently received a lump sum payment following a critical illness claim for cancer. The lump sum covers the mortgage and there is a bit extra.

My prognosis is good, and I'm back at work. So in some ways, I'm in a good position.

My dilemma is whether to pay off the mortgage and live mortgage free, or to take out a smaller mortgage and buy the house of our dreams. My wife is keen on the second option, but I'm aware that we would be taking some risk. If I get ill again, I'm not insured, so the new mortgage would be in my wife's name, and she would need to be able to pay it off on her part-time salary.

Any suggestions are welcome. Of course, the decision is very personal, but I'm interested to canvas opinions, and am welcome to hear creative ideas.

Thanks,
T

Being that you have reaped the benefits of how good CI cover is to have in place, have you thought of how it might affect you should your wife (god forbid) have something similar on a new mortgage? Would you struggle without her wage, or manage just fine? You're right, it is a personal decision, and one you shouldn't take lightly, but ultimately a decision only you can make!

Good luck

tonytheviking

Thanks for the quick replies. Sophie - my wife has the same CI and Life Insurance cover, so if something terrible happened to her, we would be ok financially.

Thrugelmir's suggestion is very sensible. I could take this chance to save... Problem is, the dream house is such a temptation. If I stay well (which is likely) we would be better off month on month even with the new mortgage, as the repayments would be about a third of our current repayments.

Of course, there isn't a RIGHT answer!

sophievenusdoom

tonytheviking wrote: »

Thanks for the quick replies. Sophie - my wife has the same CI and Life Insurance cover, so if something terrible happened to her, we would be ok financially.

Thrugelmir's suggestion is very sensible. I could take this chance to save... Problem is, the dream house is such a temptation. If I stay well (which is likely) we would be better off month on month even with the new mortgage, as the repayments would be about a third of our current repayments.

Of course, there isn't a RIGHT answer!

Oh I get you - my apologies for the misunderstanding. I thought you might have had 2 x single life policies or some such.

It is a tricky decision, but mull it over for a few days, talk to your wife (that is, of course the best advice hehe)

Best of luck with everything:)