Guru's... what should I do with 50k!?

barron83

Hi,

I purchased a property in 2007 for £315,000. As of now, I have approx £115,000 still to pay and the house is probably worth £290,000.

My grandad died 2 years ago and left me 50k inheritance. What would you do!?

My considerations have been:

- Use the 50k to pay off part of the mortage in staggered stages. I can pay 10% of the outstanding balance every Jan (i.e. £11,500) and any amount as of April 2012 (this is when my mortgage term expires)

- Buy a studio/1 bed for 100k on a buy-to-let? I would use the 50k as a downpayment

- thought about buying a property in the States should sterling continue upwards

Any suggestions... brilliant ideas!!?? Cheers people, much appreciated!

BitterAndTwisted

In the current economic climate I would be very wary indeed of acquiring any more debt: I'd be much more inclined to make overpayments on the current mortgage than buying another property.

BTL is no game of skittles, especially for an inexperienced landlord. Have you done any research on what rental yield you might expect for a property of that size versus the interest on your current mortgage?

Honestly, I'd steer well clear of buying property abroad unless you understand the market very well indeed. Would this be a holiday-home you're thinking of rather than an investment?

poppysarah

Aim to get mortgage free asap.

Treat yourself to a nice garden shed but don't spend a fortune.

Gwhiz

Mortgage free is the way to go..such a lovely feeling when you achieve it

Bermuda_John

burn it in the back garden

you'll get a big audience and probably a story on the news

Gorgeous_George

I'd only pay the mortgage off if it was at a rate greater than about 4%. Any lower and you could probably find somewhere better for it.

If I was buying a property to let I wouldn't choose a 1 bed anything and I wouldn't be buying today. Find somewhere safe to save it and try to think what Grandad would want you to do. Was he a risk taker?

If we have a deep recession, having £50K to hand might put you in a great position to snap up a bargain.

GG

LisbonLaura

I'd buy silver.

I await the derision

_bankrupted

I would spend half of it women, alcohol and gambling. The other half I would waste.

Gwhiz

Gorgeous_George wrote: »

I'd only pay the mortgage off if it was at a rate greater than about 4%. Any lower and you could probably find somewhere better for it.

If I was buying a property to let I wouldn't choose a 1 bed anything and I wouldn't be buying today. Find somewhere safe to save it and try to think what Grandad would want you to do. Was he a risk taker?

If we have a deep recession, having £50K to hand might put you in a great position to snap up a bargain.

GG

Where are these "safe" havens at >4%?

Gorgeous_George

Gwhiz wrote: »

Where are these "safe" havens at >4%?

I'm not sure that there is a 'safe haven' - never mind one that pays more than 4%.

Personally, I'd lend it at Zopa but this isn't everybody's cup of tea. Rates are low at the moment however, in the safest market (A*) and over 36 months, you could easily achieve 7% gross, 6% after the 1% fee. That's 4.8% after tax and even if you suffer double the estimated bad rate, you would achieve 4%. Rapid Return is being introduced soon and a decent lump sum could be loaned rather quickly and at rates higher than the offer rate.

Other than that and you are probably looking at cash ISAs. Tie the money up for 5 years and you can get more than 4% but only £5,100 could be added this year (per applicant).

GG

anselld

Gwhiz wrote: »

Where are these "safe" havens at >4%?

3x Lloyds Vantage accounts - £21k @ 4%
( OK, not strictly speaking >4%, but safe)