Which should I tackle first?

getitsorted13

I am due to be made redundant after a lengthy service with my current employer and as a result I am getting a relatively good package as part of the deal.

I have a fixed rate mortgage deal that expires on 30th April and moves from 4.89% to 2.5%. Outstanding mortgage is £68k and I have looked at the mortgage calculator on here to reduce the debt or period left to pay

My severance package is £48k after tax, but I also have a shared bank loan with my wife for approximately £9.5k remaining and due to expire in Feb 2014 and also several credit cards between us - I need to tally up this for a final amount.

Putting my lack of employment to one side, should I tackle the credit cards and bank loans first, or the mortgage? The mortgage is the largest debt, but the credit cards are a higher rate of interest?

The other curve ball being that if I find alternative employment before leaving and I am looking to move to a bigger house, should I sit on the cash/invest it and use that for any additional amount required to buy a new property?

Or consolidate all of my debt into the mortgage and have one debtor with a view to overpaying the debt with the redundancy as well as making additional monthly overpayments?

I think I need to see an IFA, but wanted to seek advice here before I find an IFA who starts thinking of all the commission he will get from getting me to sign up to new products?

Any advice/comments gratefully received?

david_hellier

Pay off your most expensive debts first. Buying a house at the moment is not recommended unless you can knock about 30% off the asking price.

[Deleted User]

I am due to be made redundant after a lengthy service with my current employer and as a result I am getting a relatively good package as part of the deal.

I have a fixed rate mortgage deal that expires on 30th April and moves from 4.89% to 2.5%. Outstanding mortgage is £68k and I have looked at the mortgage calculator on here to reduce the debt or period left to pay

My severance package is £48k after tax, but I also have a shared bank loan with my wife for approximately £9.5k remaining and due to expire in Feb 2014 and also several credit cards between us - I need to tally up this for a final amount.

If the credit cards are charging the highest interest it's best to pay them first.

Also check if paying of your loan early would incurr an early repayment charge/fee/similar (and work out from there if it's better to pay early or not)

If mortgage is the lowest interest rate being charged, then consider overpaying on this only after higher rate debts are paid

Putting my lack of employment to one side, should I tackle the credit cards and bank loans first, or the mortgage? The mortgage is the largest debt, but the credit cards are a higher rate of interest?

pay them off in the order of highest interest rate charged to lowest interest rate charged (you will pay less interest back overall this way)

The other curve ball being that if I find alternative employment before leaving and I am looking to move to a bigger house, should I sit on the cash/invest it and use that for any additional amount required to buy a new property?

Pay off all high interest debt first, then weigh up your options

Or consolidate all of my debt into the mortgage and have one debtor with a view to overpaying the debt with the redundancy as well as making additional monthly overpayments?

I don't think that there's anyone on here that would recomment switching unsecured debt to secured debt

I think I need to see an IFA, but wanted to seek advice here before I find an IFA who starts thinking of all the commission he will get from getting me to sign up to new products?

Any advice/comments gratefully received?

Comments above, I hope you manage to find a solution that suits (and a bew job soon too), Good luck

D9